Zumiez(US:ZUMZ)2020-06-05 03:29Financial Data and Key Metrics Changes - First quarter net sales decreased 35.3% to $137.8 million compared to $212.9 million in the first quarter of 2019, driven by COVID-19 impacts and store closures [25][31] - Cash and current marketable securities increased 29.3% to $217.2 million as of May 2, 2020, compared to $168 million in Q4 2019 [21] - Net loss for the first quarter was $21.1 million or $0.84 per share compared to net income of $0.8 million or $0.03 per share in the first quarter of 2019 [31] Business Line Data and Key Metrics Changes - All categories experienced total sales declines, with hard goods being the least negatively impacted [26] - E-commerce sales grew significantly, with online sales increasing by 75.9% during the store closures [26] - Comparable sales for May increased 79.6%, with open store comparable sales up 38.5% and e-commerce comparable sales up 181.6% [33] Market Data and Key Metrics Changes - North American net sales decreased 38% to $116.6 million, while other international net sales decreased 15% to $21.2 million [25] - Total May sales were down 8.6% compared to the same period in 2019, showing improvement from the first quarter decline [32] Company Strategy and Development Direction - The company is focusing on long-term strategic investments, including real estate opportunities and enhancing its omnichannel environment [16] - Plans to open approximately nine new stores in 2020, down from an initial plan of 20 stores, indicating a cautious approach to expansion [35] - The company aims to leverage its strong financial position to navigate the current retail environment and capitalize on potential market consolidation [17][66] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about emerging stronger from the crisis, citing the strength of the company's culture and brand [17] - There is significant uncertainty regarding consumer spending and the overall economic environment, leading to cautious planning for the remainder of the year [49] - The company is actively managing costs and aligning its expense structure with anticipated sales losses [34] Other Important Information - The company suspended most rent payments while negotiating with landlords for potential rent relief during store closures [9] - The company maintained full pay for full-time employees throughout the pandemic, emphasizing its commitment to its workforce [10] Q&A Session Summary Question: Observations on sales recovery and regional variations - Management noted that 87% of opened stores have comped positively, with strong performance in both indoor and outdoor centers [45] Question: Inventory leverage for back-to-school - Management expressed confidence in being able to manage inventory effectively, despite uncertainties regarding back-to-school dynamics [54] Question: Digital component profitability - Management highlighted the integration of digital and physical sales channels, noting that both contribute similarly to overall profitability [60]