Zumiez(US:ZUMZ)2022-03-11 01:58Financial Data and Key Metrics Changes - In Q4 2021, net sales increased by 4.6% year-over-year to a record $346.7 million, with diluted earnings per share reaching $1.70, also a quarterly record [7][24] - For the full year 2021, total sales were $1.18 billion, up 19.5% from $990.7 million in 2020, and diluted earnings per share increased to $4.85 from $3 in the previous year [25][30] - Gross margin for Q4 2021 was 38.6%, a slight decrease from 39.1% in the previous year, primarily due to increased costs related to inventory shrinkage and obsolescence [22] Business Line Data and Key Metrics Changes - In Q4 2021, the men's category was the largest growth category, followed by footwear, accessories, and women's, while hardgoods was the only negative category [21] - For the full year, North America net sales were $1.03 billion, an increase of 19.1% over 2020, while other international net sales were $153.2 million, up 22.5% from the previous year [26] Market Data and Key Metrics Changes - North America net sales in Q4 2021 were $287 million, a 0.6% increase over 2020, while other international net sales (Europe and Australia) were $59.6 million, up 28.8% from last year [20] - The company experienced temporary COVID-related closures in Europe, which was open for approximately 94% of potential operating days during Q4 2021 [21] Company Strategy and Development Direction - The company plans to open approximately 34 new stores in 2022, including 15 in North America, 14 in Europe, and 5 in Australia, indicating a focus on expansion [44] - The strategy emphasizes a consumer-centric approach, leveraging a channelless organization to enhance customer experience and operational efficiency [13][14] Management's Comments on Operating Environment and Future Outlook - Management expressed concerns about the impact of rising inflation and the ongoing conflict in Ukraine on consumer spending and overall business performance [12][40] - The company anticipates challenges in the first half of 2022 due to tough comparisons with the previous year's stimulus-fueled results, but expects improvement in the second half during peak shopping seasons [39][41] Other Important Information - The company repurchased 4.6 million shares at an average cost of $43.30 per share during 2021, with $83.3 million remaining on the current share repurchase authorization as of the end of the fiscal year [32] - Inventory levels decreased by 4.2% year-over-year, indicating a healthy inventory position despite supply chain challenges [33] Q&A Session Summary Question: Outlook for store growth and confidence in expansion - Management highlighted market opportunities identified through trade area analysis and substantial savings in lease costs as key factors supporting confidence in store growth [49][50] Question: Expectations for the year and impact of external factors - Management acknowledged the challenges posed by the Ukraine conflict and inflation but expressed confidence in the brand's strength and consumer demand during peak seasons [58][59] Question: Profitability of Blue Tomato and European market outlook - Management indicated that while Blue Tomato was not profitable in 2021, they expect to reach breakeven in 2022, contingent on a more normalized environment [68][69]