Zumiez (ZUMZ) Q1 2026 Earnings Call June 05, 2025 05:00 PM ET Speaker0 Good afternoon, ladies and gentlemen, and welcome to Zumiez Inc. First Quarter Fiscal twenty twenty five 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 call. Before we begin, I'd like to remind everyone of the company's safe harbor language. Today's conference call includes comments concerning Zulmiz Inc. Business outlook and contai ...

Group 1 - Genesco Inc. reported Q1 '26 earnings results, indicating a mixed quarter performance [1] - Journeys showed good comparable sales, but gross profit did not increase due to rising footwear prices [1] Group 2 - The investment approach focuses on operational aspects and long-term earnings potential rather than market-driven dynamics [1] - The strategy emphasizes holding companies for the long term, with a small fraction being considered for buy recommendations [1]

Company Performance - Toro reported quarterly earnings of $1.42 per share, exceeding the Zacks Consensus Estimate of $1.38 per share, and showing a slight increase from $1.40 per share a year ago, representing an earnings surprise of 2.90% [1] - The company posted revenues of $1.32 billion for the quarter ended April 2025, which was below the Zacks Consensus Estimate by 1.94%, and a decrease from $1.35 billion in the same quarter last year [2] - Over the last four quarters, Toro has surpassed consensus EPS estimates two times but has not beaten revenue estimates during this period [2] Stock Outlook - Toro shares have declined approximately 5.6% since the beginning of the year, contrasting with the S&P 500's gain of 1.5% [3] - The company's earnings outlook is mixed, with the current consensus EPS estimate for the upcoming quarter at $1.23 on revenues of $1.15 billion, and for the current fiscal year at $4.30 on revenues of $4.62 billion [7] - The Zacks Rank for Toro is currently 3 (Hold), indicating that the shares are expected to perform in line with the market in the near future [6] Industry Context - The Tools - Handheld industry, to which Toro belongs, is currently ranked in the bottom 10% of over 250 Zacks industries, suggesting potential challenges for stock performance [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact Toro's stock performance [5]

Financial Data and Key Metrics Changes - Revenue increased by 2% above guidance, with non-GAAP EPS also exceeding expectations [5][32] - Total direct-to-consumer revenue decreased by approximately 3%, while e-commerce grew by 3% [5][36] - Wholesale revenue grew in the mid-single digits, benefiting from earlier shipments and the relaunch of Calvin Klein women's sportswear and jeans [5][6] Business Line Data and Key Metrics Changes - Calvin Klein's underwear and jeans categories saw a 25% increase in sales due to innovative product launches [8] - Fashion denim for Calvin Klein grew by 14% in Q1, indicating strong performance in innovative offerings [9] - Tommy Hilfiger also experienced growth through new seasonal collections and strategic marketing campaigns [10][11] Market Data and Key Metrics Changes - EMEA revenue increased mid-single digits, with direct-to-consumer growth turning positive [12][34] - Americas revenue rose by 7%, driven by high teens growth in wholesale [34] - Asia Pacific revenues declined low teens due to weaker consumer confidence and earlier Lunar New Year timing [16][35] Company Strategy and Development Direction - The company is focused on executing the PVH Plus plan to strengthen brand performance and consumer engagement [5][7] - Strategic initiatives include product innovation, enhanced marketing campaigns, and a focus on core strengths in Calvin Klein and Tommy Hilfiger [10][29] - The company is navigating a challenging macro environment while aiming to improve operational efficiencies and reduce costs [21][49] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a tough macro environment but emphasized control over internal actions to drive performance [7][21] - The company is facing increased promotional levels and tariff impacts, particularly in the U.S. market [21][41] - Despite challenges, management remains optimistic about long-term growth and brand strength, particularly in key markets [22][46] Other Important Information - The company returned over $550 million to shareholders through share repurchases [32] - Inventory levels increased by 19% compared to the previous year, primarily due to strategic investments in core product categories [39] - A non-cash goodwill impairment charge of $480 million was recorded, reflecting increased discount rates [39] Q&A Session Summary Question: What gives confidence that Calvin and Tommy still have good momentum with consumers? - Management highlighted strong product innovation and marketing efforts that have driven significant growth in key categories despite macro challenges [56][57] Question: Can you elaborate on the cost-out efforts and their impact? - Management discussed ongoing operational improvements and cost-saving initiatives aimed at enhancing efficiency and profitability [65][70] Question: How are tariffs impacting the business and what mitigation strategies are in place? - Management outlined the expected $65 million impact from tariffs and discussed leveraging global sourcing relationships to mitigate costs [78][81]

Financial Data and Key Metrics Changes - Revenue for Q1 2025 increased by 2% above guidance, with non-GAAP EPS also exceeding expectations [6][35] - Total direct-to-consumer revenue declined approximately 3%, while e-commerce revenue grew by 3% [6][39] - Gross margin decreased to 58.6%, down 280 basis points compared to the previous year [40][41] - EBIT for the quarter was $160 million, with an operating margin of 8.1% [41] Business Line Data and Key Metrics Changes - Calvin Klein's underwear and jeans categories saw a 25% increase in sales due to innovative product launches [9][60] - Tommy Hilfiger experienced a 3% revenue increase, driven by growth in EMEA and Americas [39] - Wholesale revenue increased by mid-single digits, benefiting from earlier shipments and the relaunch of Calvin Klein women's sportswear [6][15] Market Data and Key Metrics Changes - EMEA revenue grew by 4% in constant currency, with mid-single digit growth in wholesale [37] - Americas revenue increased by 7%, driven by high teens growth in wholesale [37] - Asia Pacific revenues declined by low teens on a reported basis, attributed to weaker consumer confidence [17][38] Company Strategy and Development Direction - The company is focused on executing the PVH Plus plan to strengthen brand performance and consumer engagement [6][33] - Plans to enhance product innovation and marketing efforts, particularly in Calvin Klein's underwear and denim categories [28][29] - The company is taking back licenses for Calvin Klein sportswear and jeans to improve brand control and execution [20] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a challenging macro environment, with weakened consumer sentiment and increased promotional levels [22][47] - The company remains committed to long-term growth in China despite current challenges [23] - Full-year revenue guidance is reaffirmed as flat to slightly up, but EPS guidance has been adjusted down due to macro pressures [27][49] Other Important Information - The company returned over $550 million to shareholders through share repurchases [36] - Inventory levels increased by 19% compared to the previous year, primarily due to strategic investments in core product categories [42] Q&A Session Summary Question: What gives confidence that both brands still have good momentum with consumers? - Management highlighted strong product innovation and marketing efforts that have driven significant growth in key categories despite macro challenges [58][60] Question: Can you provide details on the cost-out efforts and their timing? - Management discussed ongoing operational improvements and cost-saving initiatives that are expected to deliver significant benefits in the second half of the year [66][75] Question: How are tariffs impacting the business and what mitigation strategies are in place? - The company identified a $65 million unmitigated impact from tariffs and is working on optimizing sourcing and production costs to mitigate this effect [78][81]

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Xcel Brands (XELB) Q1 2025 Earnings Call June 04, 2025 05:00 PM ET Company Participants Seth Burroughs - Executive VP of Business Development & Treasury and SecretaryRobert D'Loren - Chairman & Chief Executive OfficerJames Haran - CFO, Principal Financial & Accounting Officer and Assistant SecretaryMichael Kupinski - Director of Research, Managing Director, Head of Technology Research Conference Call Participants Anthony Lebiedzinski - Senior Equity Research Analyst Operator Ladies and gentlemen, thank you ...

Financial Data and Key Metrics Changes - Total revenues for Q4 2024 were $1.2 million and for the full fiscal year 2024 were $8.3 million, both approximately half of the prior year due to the sale of the Lori Goldstein brand and exit from wholesale operations [13][14] - Total revenues for Q1 2025 were $1.3 million, showing a slight increase from Q4 2024 [13] - The company reported a net loss of approximately $2.8 million for Q1 2025, an improvement from a loss of $6.3 million in the prior year quarter, representing a 56% improvement on a GAAP basis [18] - Adjusted EBITDA for Q1 2025 was negative $700,000, a 56% improvement over the negative $1.6 million reported in the prior year quarter [18] Business Line Data and Key Metrics Changes - The company has significantly reduced direct operating costs and expenses by nearly 50% year over year from FY 2023 to FY 2024 [14] - Direct operating expenses for Q1 2025 were approximately $2.3 million, about 40% lower than the prior year period [14] - The company generated an adjusted EBITDA loss of $792,000 in Q4 2024, which is a $361,000 improvement over Q4 2023 [12] Market Data and Key Metrics Changes - The social media reach across the brand portfolio grew from 5 million followers in January 2025 to 45 million to date, indicating a significant increase in media currency [9] - The company aims to build a portfolio of creator influencer brands that reaches 100 million followers, which is expected to accelerate growth [11] Company Strategy and Development Direction - The company closed a strategic transaction with United Trademark Group in April 2025, enhancing its brand management and supply chain capabilities [7] - The partnership with UTG is expected to accelerate the formation of additional creator influencer brands [8] - The company is focusing on acquiring brands with significant social media followings and media companies to extend its reach [34] Management's Comments on Operating Environment and Future Outlook - Management expressed caution for Q3 and Q4 2025 due to potential impacts from tariffs and the consolidation of HSN's operations [10] - The company is assessing the impact of tariffs and the HSN Tampa studio closure and is working on potential solutions, including short-term domestic production [12] - Management forecasts adjusted EBITDA for 2025 to be in the range of $1 million to $2.5 million, including potential impacts from tariffs and operational disruptions [21] Other Important Information - The company reported stockholders' equity of approximately $26 million and unrestricted cash of approximately $300,000 as of March 31, 2025 [19] - The company refinanced its term debt in April 2025, resulting in a net increase of approximately $3 million in liquidity [19] Q&A Session Summary Question: Clarification on adjusted EBITDA for 2025 - Management confirmed that the adjusted EBITDA forecast includes potential impacts from tariffs and disruptions due to HSN's relocation [21] Question: Run rate of operating costs - The run rate for operating costs is approximately $9 million annually, translating to less than $2.5 million per quarter [23][24] Question: Guarantees from G III on Halston - The guaranteed minimum under the license is $1.7 million per year, with expectations for a slight pickup in Q2 [25] Question: Liquidity needs for upcoming launches - Management indicated that current liquidity is sufficient, but they will address any additional capital needs as they arise [26][27] Question: Revenue potential from new brands - Management anticipates that new brands like Cesar Millan's pet products could generate between $5 million and $10 million in royalty income per year [46] Question: Operating expenses as the business pivots to growth - The structure is designed to scale, with incremental costs primarily tied to revenue growth [47][48]

Core Viewpoint - Xcel Brands, Inc. reported a challenging first quarter of 2025 with a significant decrease in total revenue, but showed improvements in operational costs and social media engagement, positioning the company for future growth [2][3][5]. Financial Performance - Total revenue for Q1 2025 was $1.3 million, down approximately $0.9 million (-39%) from Q1 2024, primarily due to a decline in net licensing revenue following the divestiture of the Lori Goldstein brand [3]. - Direct operating costs and expenses decreased by approximately $1.7 million (-42%) to $2.3 million in Q1 2025, with an expected annual run rate of less than $10 million [4]. - The net loss attributable to Xcel Brands stockholders for Q1 2025 was approximately $2.8 million, or $(1.18) per share, compared to a net loss of $6.3 million, or $(3.09) per share, in the prior year [5][10]. - Adjusted EBITDA improved from negative $1.6 million in Q1 2024 to negative $0.7 million in Q1 2025, representing a 56% improvement [6][10]. Balance Sheet - As of March 31, 2025, the company had stockholders' equity of approximately $25.7 million, unrestricted cash and cash equivalents of approximately $0.3 million, and a working capital deficit of approximately $0.6 million [7]. - The company also reported $8.5 million in long-term debt [7]. Brand and Market Position - The social media following of Xcel's brand portfolio increased from 5 million to 45 million followers over the past five months, with a goal of reaching 100 million followers [2]. - Xcel Brands has generated over $5 billion in retail sales through livestreaming and digital channels, with a broadcast reach into 200 million households [11].

Core Insights - NIKE Inc. (NKE) is a leader in digital athleticwear sales, holding a top-three position globally and reaching consumers in nearly 190 countries, with digital transformation as a key part of its turnaround strategy [1][4] - The company is focusing on direct-to-consumer (DTC) models, data analytics, and AI-driven personalization to enhance customer experience and reposition NIKE Digital as a premium channel [2][4] - Despite a strategic reset leading to expected declines in digital revenues in the near term, NIKE aims to regain brand strength and margin expansion through reduced promotions and improved storytelling [3][4] Digital Strategy - NIKE's digital sales fell 15% year-over-year in Q3 fiscal 2025, contributing to a 10% drop in overall DTC revenues, attributed to a significant reduction in promotional activities [4][9] - The company is implementing initiatives like "zero promotional days" in North America to transform its digital channel into a full-price, premium experience [2][4] - Digital sales still represent about 40% of NIKE's total global revenues, highlighting its strategic importance [4][9] Competitive Landscape - Major competitors in the digital space include lululemon athletica inc. and adidas AG, both of which have strong digital presences and are expanding their market shares [6][8] - lululemon's digital business accounts for over 40% of its total revenues, focusing on personalized shopping experiences and community engagement [7] - adidas aims to increase its digital sales to 50% of total sales by 2025, leveraging personalized shopping and loyalty programs [8] Financial Performance - NIKE shares have declined approximately 16.3% year-to-date, contrasting with the industry's growth of 16% [11] - The forward price-to-earnings ratio for NIKE is 29.33X, higher than the industry average of 20.78X, indicating a premium valuation [13] - Earnings estimates for fiscal 2025 and 2026 suggest a year-over-year decline of 46.1% and 8.7%, respectively, with recent adjustments in EPS estimates reflecting market conditions [14][15]