Group 1 - The company reported a 5.5% growth in comparable sales for the first quarter, marking the fourth consecutive quarter of positive growth [4] - The North American business demonstrated resilience despite a complex macroeconomic environment [4] - The CEO highlighted the successful execution of strategic initiatives contributing to the positive performance [4] Group 2 - The conference call included forward-looking statements regarding the company's business outlook [2] - The CFO will provide detailed financials and outlook for the remainder of the year [3]

Financial Performance - Zumiez reported a quarterly loss of $0.79 per share, slightly worse than the Zacks Consensus Estimate of a loss of $0.77, but an improvement from a loss of $0.86 per share a year ago [1] - The company posted revenues of $184.34 million for the quarter ended April 2025, exceeding the Zacks Consensus Estimate by 0.99% and up from $177.39 million year-over-year [2] - Over the last four quarters, Zumiez has surpassed consensus EPS estimates two times and topped consensus revenue estimates three times [2] Stock Performance - Zumiez shares have declined approximately 34.4% since the beginning of the year, contrasting with the S&P 500's gain of 1.5% [3] - The current Zacks Rank for Zumiez is 3 (Hold), indicating that the shares are expected to perform in line with the market in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.06 on revenues of $211.02 million, and for the current fiscal year, it is $0.24 on revenues of $900.58 million [7] - The estimate revisions trend for Zumiez is mixed, and changes in earnings expectations may occur following the recent earnings report [6] Industry Context - The Retail - Apparel and Shoes industry, to which Zumiez belongs, is currently ranked in the bottom 42% of over 250 Zacks industries, suggesting potential challenges ahead [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact Zumiez's stock performance [5]

Financial Data and Key Metrics Changes - First quarter net sales reached $184.3 million, a 3.9% increase from $177.4 million in the same period last year [12] - Comparable sales grew by 5.5%, marking the fourth consecutive quarter of positive growth [4][12] - Gross profit for the first quarter was $55.3 million, up 6.6% compared to $51.9 million last year, with a gross margin increase to 30% from 29.3% [15] - Net loss for the first quarter was $14.3 million, or $0.79 per share, compared to a net loss of $16.8 million, or $0.86 per share, in the prior year [16] Business Line Data and Key Metrics Changes - North America net sales were $149.7 million, a 4.9% increase from the previous year, with comparable sales up 7.4% [13] - Other international net sales, which include Europe and Australia, were $34.6 million, down 0.2% year-over-year, with comparable sales down 2.3% [13][14] - The women's category was the largest positive contributor to comparable sales, while hard goods was the only negative category [14] Market Data and Key Metrics Changes - North America showed strong performance despite macroeconomic uncertainties, while Europe faced challenges with a slower start in 2025 [8][13] - Comparable sales for North America increased by 5.1% in May, while other international sales decreased by 14.8% [20][21] Company Strategy and Development Direction - The company is focused on three strategic priorities: accelerating top-line expansion, maintaining profitability, and leveraging financial strength for growth [5][6] - Plans to diversify sourcing to reduce exposure to China, aiming for a decrease from 50% to potentially 30% by the end of 2025 [5][36] - Continued investment in customer engagement and product newness, with a commitment to expanding private label offerings [6][7] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the global trade environment and maintaining profitability despite uncertainties [5][10] - The company anticipates total sales for the second quarter to be between $207 million and $214 million, representing a slight change from the prior year [23] - There is an expectation of modest year-over-year growth in product margin, despite challenges from tariffs and market conditions [26] Other Important Information - The company repurchased 1.8 million shares in the first quarter, representing 9.4% of outstanding shares, and announced a new buyback plan for an additional $15 million [9][18] - Inventory levels increased by 2.1% year-over-year, with expectations to end fiscal 2025 with lower inventory than the previous year [18][19] Q&A Session Summary Question: Can you walk us through the impact of tariffs? - Management highlighted proactive measures taken to mitigate tariff impacts, including sourcing adjustments and cost management strategies [31][34][36] Question: What is the outlook for product margins given tariff exposure? - Management remains optimistic about achieving year-over-year product margin growth despite tariff challenges, focusing on strategic pricing and bundling [38][39] Question: What is the strategy for improving performance in other international markets? - The company is focusing on profitability and cash flow in Europe, with plans to drive top-line growth through product innovation and margin expansion [41][44][46]

Financial Data and Key Metrics Changes - First quarter net sales reached $184.3 million, up 3.9% from $177.4 million in the first quarter of 2024 [12] - Comparable sales grew 5.5%, marking the fourth consecutive quarter of positive growth [4] - Gross profit for the first quarter was $55.3 million, a 6.6% increase compared to $51.9 million in the same quarter last year [15] - Net loss for the first quarter was $14.3 million, or $0.79 per share, compared to a net loss of $16.8 million, or $0.86 per share, in the first quarter of 2024 [16] Business Line Data and Key Metrics Changes - North America net sales were $149.7 million, an increase of 4.9% from 2024, with comparable sales up 7.4% [13] - Other international net sales, which include Europe and Australia, were $34.6 million, down 0.2% from last year, with comparable sales down 2.3% [13][14] - The women's category was the largest positive comping category, while hard goods was the only negative comping category [14] Market Data and Key Metrics Changes - North America comparable sales increased 5.1% during the four-week period ended May 31, 2025, while other international comparable sales decreased 14.8% [20] - The company anticipates total sales for the second quarter to be between $207 million and $214 million, representing a negative 2% to positive 2% change from the prior year [22] Company Strategy and Development Direction - The company is focused on three strategic priorities: accelerating top-line expansion, maintaining profitability, and leveraging financial strength to navigate uncertainty [5][6] - Plans to reduce exposure to China by diversifying the sourcing base, aiming for no individual country to represent more than 20% of goods sourced by 2026 [5][36] - The company expects to open nine new stores in 2025 while closing approximately 20 stores [27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the global trade environment and adapting to changing market conditions [4][5] - The company anticipates modest year-over-year growth in product margin in 2025, despite challenges from tariffs and store closures [26] - Management noted that achieving previously mentioned annual expectations for fiscal 2025 remains feasible [26] Other Important Information - The company ended the quarter with $101 million in cash and current marketable securities, with no debt on the balance sheet [9][17] - A new share repurchase plan for up to $15 million was authorized by the Board of Directors [18] Q&A Session Summary Question: Can you walk us through the tariff situation and its impact on COGS? - Management highlighted proactive measures taken to mitigate tariff impacts, including sourcing adjustments and cost management strategies [30][32][36] Question: What is the anticipated product margin growth despite tariff exposure? - Management indicated that they expect to grow product margin modestly through various strategies, including working with brand partners and adjusting pricing [37][39] Question: What is the strategy for improving results in the other international markets? - Management acknowledged the challenges in Europe and emphasized a focus on profitability and cash flow, with plans to drive top-line growth through new product offerings [40][44][46]

Financial Performance - First quarter net sales increased by 3.9% to $184.3 million compared to $177.4 million in the same period last year[3] - Comparable sales for the first quarter rose by 5.5%, with North America showing a 7.4% increase[1][3] - The net loss for the first quarter was $14.3 million, or $0.79 per diluted share, an improvement from a net loss of $16.8 million, or $0.86 per diluted share, in the prior year[3][16] - Zumiez Inc. reported a net loss of $14,330,000 for the three months ended May 3, 2025, compared to a net loss of $16,780,000 for the same period in 2024, showing an improvement of approximately 8.7%[20] Cash Flow and Financial Position - Cash and current marketable securities decreased to $101.0 million from $146.6 million year-over-year, primarily due to $50.4 million in share repurchases[4] - The company experienced a net cash used in operating activities of $22,084,000, which is a decline from $18,577,000 in the previous year, indicating increased cash outflow[20] - Cash flows from investing activities resulted in a net cash outflow of $4,188,000, a significant decrease from a net inflow of $7,997,000 in the prior year[20] - Financing activities led to a net cash outflow of $25,029,000, compared to a slight inflow of $228,000 in the same period last year, primarily due to stock repurchases[20] - The company reported cash, cash equivalents, and restricted cash of $71,824,000 at the end of the period, down from $83,687,000 a year earlier, reflecting a decrease of approximately 14.2%[20] Share Repurchase and Stock Authorization - The company repurchased 1.8 million shares at an average cost of $13.82 per share, totaling $25.2 million[4] - The board approved a new stock repurchase authorization of up to $15 million, expected to continue through June 30, 2026[9] Future Outlook - For the second quarter, the company expects net sales between $207 million and $214 million, with a loss per share between $0.09 and $0.24[7] - Zumiez plans to open approximately 9 new stores in fiscal 2025, including 6 in North America, 2 in Europe, and 1 in Australia[8] - The company aims to diversify its North American supply chain to reduce exposure to China by the end of the year[5] International Sales and Product Strategy - International sales were slightly negative in the first quarter, prompting a focus on introducing new products to drive demand[5] Depreciation and Expenses - Zumiez Inc. recorded depreciation, amortization, and accretion expenses of $5,387,000, slightly lower than $5,561,000 in the previous year[20] - Noncash lease expenses were reported at $14,639,000, which is consistent with $14,522,000 from the same period last year[20] - The company paid $412,000 in income taxes during the period, a decrease from $654,000 in the prior year[20] - Zumiez Inc. had a significant change in trade accounts payable, with a decrease of $1,357,000 compared to an increase of $21,763,000 in the previous year[20] - The company reported an impairment of long-lived assets amounting to $462,000, compared to $101,000 in the same period last year, indicating increased asset write-downs[20]

Core Insights - Zumiez Inc. reported a net sales increase of 3.9% to $184.3 million for the first quarter ended May 3, 2025, compared to $177.4 million in the same period last year [3] - Comparable sales for the same period increased by 5.5%, with North America showing a stronger performance at 7.4% [1][3] - The company experienced a net loss of $14.3 million, or $0.79 per diluted share, an improvement from a net loss of $16.8 million, or $0.86 per diluted share, in the prior year [3][5] Financial Performance - The first quarter's gross profit margin improved to 30.0% from 29.3% year-over-year, while selling, general and administrative expenses increased to 40.8% of sales [15] - The company had cash and current marketable securities of $101.0 million as of May 3, 2025, down from $146.6 million a year earlier, primarily due to share repurchases and capital expenditures [4] - Zumiez repurchased 1.8 million shares at an average cost of $13.82 per share, totaling $25.2 million during the first quarter [4][9] Market Outlook - The company anticipates net sales for the second quarter of fiscal 2025 to be between $207 million and $214 million, with a projected loss per share ranging from $0.09 to $0.24 [7] - Zumiez plans to open approximately 9 new stores in fiscal 2025, including 6 in North America, 2 in Europe, and 1 in Australia [8] Strategic Initiatives - The CEO highlighted the company's efforts to diversify its North American supply chain to reduce exposure to China amid ongoing trade negotiations [5] - The company aims to introduce new and unique products to drive demand while controlling costs to improve margins, especially in international markets where sales have been challenging [5]

[Part I. Financial Information](index=3&type=section&id=Part%20I.%20Financial%20Information) [Condensed Consolidated Financial Statements](index=3&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements) The company's unaudited interim statements show a reduced net loss of $14.3 million and a decrease in total assets to $599.1 million [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased to $599.1 million, primarily due to a reduction in cash and shareholders' equity from share repurchases Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | May 3, 2025 (Unaudited) | February 1, 2025 | | :--- | :--- | :--- | | **Total current assets** | $281,190 | $322,385 | | Cash and cash equivalents | $62,519 | $112,668 | | Inventories | $149,864 | $146,648 | | **Total assets** | **$599,100** | **$634,881** | | **Total current liabilities** | $146,875 | $155,514 | | **Total liabilities** | **$300,622** | **$305,904** | | **Total shareholders' equity** | **$298,478** | **$328,977** | [Condensed Consolidated Statements of Loss](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Loss) Net sales grew 3.9% to $184.3 million, leading to a reduced quarterly net loss of $14.3 million Consolidated Statements of Loss (in thousands, except per share amounts) | Metric | Three Months Ended May 3, 2025 | Three Months Ended May 4, 2024 | | :--- | :--- | :--- | | Net sales | $184,343 | $177,388 | | Gross profit | $55,315 | $51,899 | | Operating loss | $(19,872) | $(20,155) | | Net loss | $(14,330) | $(16,780) | | Diluted loss per share | $(0.79) | $(0.86) | [Condensed Consolidated Statements of Comprehensive Loss](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss) Comprehensive loss improved significantly to $7.3 million, driven by positive foreign currency translation adjustments Consolidated Statements of Comprehensive Loss (in thousands) | Metric | Three Months Ended May 3, 2025 | Three Months Ended May 4, 2024 | | :--- | :--- | :--- | | Net loss | $(14,330) | $(16,780) | | Foreign currency translation | $6,614 | $(895) | | **Comprehensive loss** | **$(7,298)** | **$(17,778)** | [Condensed Consolidated Statements of Changes in Shareholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Shareholders%27%20Equity) Shareholders' equity declined by $30.5 million, mainly due to a $25.2 million share repurchase and the quarterly net loss - The company repurchased 1,808 thousand shares of its common stock for a total of **$25.2 million** during the quarter[15](index=15&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash decreased by $49.7 million, driven by cash used in operating, investing, and financing activities Summary of Cash Flows (in thousands) | Cash Flow Activity | Three Months Ended May 3, 2025 | Three Months Ended May 4, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(22,084) | $(18,577) | | Net cash (used in) provided by investing activities | $(4,188) | $7,997 | | Net cash (used in) provided by financing activities | $(25,029) | $228 | | **Net decrease in cash** | **$(49,693)** | **$(10,597)** | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Key disclosures include store footprint, regional sales, a $2.9 million lawsuit settlement, and share repurchase activities - The company operates **730 stores** under the names Zumiez, Blue Tomato, and Fast Times across the U.S. (569), Europe (87), Canada (46), and Australia (28)[20](index=20&type=chunk) Net Sales by Geographic Region (in thousands) | Region | Three Months Ended May 3, 2025 | Three Months Ended May 4, 2024 | | :--- | :--- | :--- | | United States | $140,040 | $133,873 | | Europe | $29,292 | $29,569 | | Canada | $9,693 | $8,826 | | Australia | $5,318 | $5,120 | | **Total Net Sales** | **$184,343** | **$177,388** | - The company reached a settlement in principle for **$2,890,000** in the Seana Neihart PAGA lawsuit, subject to court approval[41](index=41&type=chunk) - On June 4, 2025, the company approved a new share repurchase program for up to **$15 million** of its common stock, expected to continue through June 30, 2026[63](index=63&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=21&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses a 3.9% sales increase, improved gross margin, higher SG&A, and future capital expenditure plans - Net sales increased **3.9% to $184.3 million**, driven by a **5.5% increase in comparable sales** attributed to higher dollars per transaction[79](index=79&type=chunk) - Gross profit as a percentage of net sales **increased by 70 basis points to 30.0%**, primarily due to leverage in store occupancy costs[80](index=80&type=chunk) - SG&A expenses increased by $3.1 million, and as a percentage of sales rose by 20 basis points, largely due to a **160 basis point impact from a $2.9 million litigation settlement**[81](index=81&type=chunk) - The company expects to spend approximately **$14.0 million to $16.0 million** on capital expenditures in fiscal 2025, mainly for opening about 9 new stores and for remodels/relocations[87](index=87&type=chunk) - On December 20, 2024, the company entered into a new **$25 million revolving credit facility** with PNC Bank, replacing its previous agreement with Wells Fargo[92](index=92&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=31&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's market risk profile remains materially unchanged from the previous fiscal year-end - The company's market risk profile has **not significantly changed** since February 1, 2025[148](index=148&type=chunk) [Controls and Procedures](index=31&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective with no material changes to internal controls - Management, including the CEO and CFO, concluded that **disclosure controls and procedures were effective** as of May 3, 2025[149](index=149&type=chunk) - There were **no changes in internal control over financial reporting** during the quarter that materially affected, or are reasonably likely to materially affect, the company's internal controls[150](index=150&type=chunk) [Part II. Other Information](index=32&type=section&id=Part%20II.%20Other%20Information) [Legal Proceedings](index=32&type=section&id=Item%201.%20Legal%20Proceedings) The company notes routine litigation and refers to a $2.9 million settlement detailed in the financial statement notes - The company refers to Note 5 of the financial statements for details on litigation, which discloses a settlement in principle of **$2,890,000** for a PAGA lawsuit[152](index=152&type=chunk)[41](index=41&type=chunk) [Risk Factors](index=32&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors have occurred since the last Annual Report on Form 10-K - There have been **no material changes** in the risk factors from those disclosed in the Annual Report on Form 10-K for the year ended February 1, 2025[153](index=153&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=32&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company details the completion of its $25 million share repurchase program during the quarter Issuer Purchases of Common Stock (in thousands, except price per share) | Period | Total Number of Shares Purchased | Average Price Paid per Share | Dollar Value of Shares that May Yet Be Repurchased Under the Plans | | :--- | :--- | :--- | :--- | | Feb 2 - Mar 1, 2025 | — | $— | $— | | Mar 2 - Apr 5, 2025 | 832 | $14.59 | $13,054 | | Apr 5 - May 3, 2025 | 990 | $13.19 | $— | | **Total** | **1,822** | | | [Defaults Upon Senior Securities](index=32&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reports no defaults upon senior securities during the period - None[156](index=156&type=chunk) [Mine Safety Disclosures](index=32&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section is not applicable to the company's business operations - Not applicable[156](index=156&type=chunk) [Other Information](index=32&type=section&id=Item%205.%20Other%20Information) No directors or officers engaged in the adoption or termination of Rule 10b5-1 trading arrangements - No directors or officers adopted, modified, or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the three months ended May 3, 2025[156](index=156&type=chunk) [Exhibits](index=33&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including officer certifications and XBRL data - The filing includes CEO and CFO certifications pursuant to Sarbanes-Oxley Act Sections 302 and 906, as well as financial data in **Inline XBRL format**[160](index=160&type=chunk)

Core Viewpoint - Zumiez Inc. is facing significant challenges in the market, with its stock price nearing a 52-week low and a notable decline of 15.4% over the past three months, prompting a reassessment by investors [1][2]. Group 1: Performance and Market Position - Zumiez has underperformed compared to the Retail - Apparel and Shoes industry, which saw a growth of 1.9%, and the S&P 500 Index, which declined by 1.2% during the same period [2]. - The company experienced a setback during the holiday season due to an unexpected drop in demand, failing to meet internal sales expectations, which raises concerns about its adaptability to market changes [5]. - Challenges in international markets, particularly in Europe, have hindered consistent profitability, indicating deeper structural issues in Zumiez's global strategy [6]. Group 2: Supply Chain and Operational Challenges - Zumiez is vulnerable to supply-chain risks, especially related to tariffs, as approximately 50% of its North American inventory is sourced from China, exposing it to tariff-related uncertainties [7]. - The company is working on diversifying its sourcing, but this may lead to higher costs or supply disruptions, which could negatively impact profitability [7]. Group 3: Strategic Focus and Future Outlook - Despite challenges, Zumiez has shown resilience through strong comparable sales growth and improved profitability in the fourth quarter of fiscal 2024, with a focus on expanding its private label business [8][9]. - The company is optimizing operations by closing underperforming stores and refining logistics, which has led to meaningful reductions in operating costs relative to sales [10]. - For fiscal 2025, Zumiez projects total sales to increase by 1-3% and comparable sales growth of 3-5%, with a focus on enhancing product margins through private-label offerings [11]. Group 4: Valuation and Investment Appeal - Zumiez is currently trading at a forward 12-month price-to-sales (P/S) multiple of 0.26X, significantly lower than the industry average of 1.75X, suggesting it is attractively priced relative to peers [12]. - The company's Value Score of A indicates its potential appeal as an investment opportunity [12]. Group 5: Summary of Strengths and Weaknesses - Zumiez is executing well on margin expansion, cost control, and private label growth, while trading at an attractive valuation [14]. - However, struggles during the holiday season, ongoing international weaknesses, and exposure to supply-chain risks raise concerns about its near-term stability [15].

Company Overview - Zumiez Inc. is a leading specialty retailer focused on apparel, footwear, accessories, and hardgoods for young men and women interested in action sports, streetwear, and unique lifestyles [3] - As of May 3, 2025, Zumiez operates 730 stores globally, with 569 in the United States, 46 in Canada, 87 in Europe, and 28 in Australia [3] - The company operates under the names Zumiez, Blue Tomato, and Fast Times, and has ecommerce platforms at zumiez.com, blue-tomato.com, and fasttimes.com.au [3] Upcoming Financial Results - Zumiez will report its fiscal 2025 first quarter results on June 5, 2025, after the stock market closes [1] - A conference call to discuss the results will take place on the same day at 5:00 p.m. ET [1] - Participants are encouraged to pre-register for the conference call and to join 15 minutes early to avoid delays [2]

Zumiez (ZUMZ) Q4 2025 Earnings Call March 13, 2025 10:43 PM ET Company Participants Richard Brooks - CEOChristopher Work - Chief Financial Officer Conference Call Participants Mitch Kummetz - Senior Analyst Operator Good afternoon, ladies and gentlemen, and welcome to Zumie Inc. Fourth Quarter Fiscal twenty twenty four Earnings Conference Call. At this time, all participants are in a listen only mode. We will conduct a question and answer session towards the end of this conference. Before we begin, we would ...