Zumiez's Q2 Loss Narrower Than Expected, Comparable Sales Improve Y/Y

Core Insights - Zumiez Inc. reported better-than-expected second-quarter fiscal 2024 results, with a narrower loss of 4 cents per share compared to the Zacks Consensus Estimate of a loss of 33 cents per share and an improvement from a loss of 44 cents per share in the prior year [1][9] - Total net sales reached $210.2 million, exceeding the Zacks Consensus Estimate of $202 million and reflecting an 8.1% increase from $194.4 million in the prior-year quarter [2] Sales Performance - North America net sales improved by 10.4% year over year to $176.3 million, while international sales declined by 2.6% to $33.9 million [4] - Comparable sales rose 3.6%, driven by higher dollars per transaction, although offset by fewer transactions [3] - The men's category was the largest contributor to comparable sales growth, followed by women's and footwear, while hardgoods and accessories saw significant declines [5][6] Margins and Costs - Gross profit increased by 16.4% year over year to $71.8 million, with gross margin expanding by 250 basis points to 34.2% [7] - Selling, general and administrative (SG&A) expenses remained flat at $72.2 million, but as a percentage of sales, they decreased by 280 basis points to 34.4% [8] Financial Health - As of August 3, 2024, Zumiez had cash and current marketable securities of $127 million, down from $140 million a year earlier, with no debt reported [10] - Total shareholders' equity was $319.8 million, and inventory decreased by 1.3% year over year to $158.8 million [11] Future Guidance - For the fiscal third quarter of 2024, Zumiez anticipates net sales growth of 7-9% when adjusting for the retail calendar shift, with projected sales between $221 million and $204 million [19][20] - The company expects total sales growth in the low single-digit range for fiscal 2024, with an increase in product margin and a return to positive operating margins [21] Recent Performance - Net sales for the fiscal third quarter-to-date rose 6.8% compared to the same period last year, with North America sales climbing 7.8% [14][15] - Comparable sales for the four weeks ending September 2, 2024, increased by 12.1%, with North America up 14.4% [16]