Zumiez(ZUMZ) - 2024 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Comparable sales increased by 5.9%, marking the third consecutive quarter of positive comparable sales growth [5][21] - Total sales for Q4 2024 were $279 million, which was$ 7 million below the midpoint of initial guidance but $2 million above the high end of revised guidance [6][20] - Operating profit more than doubled to$ 20 million, and EPS increased by 95% to $0.78 after adjusting for a one-time goodwill impairment charge [7][25] - For the full year, net sales were$ 889.2 million, an increase of 1.6% from the previous year [27][30] Business Line Data and Key Metrics Changes - Men's category maintained positive momentum, delivering growth for the fifth consecutive quarter [8] - Women's category became the largest growth category for the quarter, continuing strong results [8][23] - Footwear positively contributed for the third consecutive quarter [8] - Hard goods faced pressure due to a downturn in skate hard goods, partially offset by gains in the snow category [9] Market Data and Key Metrics Changes - North America net sales were $214.2 million, an increase of 0.8% from the previous year [22] - Comparable sales for North America were up 7.2%, marking the fourth consecutive quarter of growth [22] - Other international net sales were$ 65 million, down 6.4% from last year, but improved to a positive 3.7% in Q4 [15][16] Company Strategy and Development Direction - The company will focus on accelerating global top-line expansion through strategic investments [11] - Key strategies include injecting assortments with newness, expanding private label businesses, and enhancing customer engagement [12][13] - The company plans to open nine new stores in 2025, including two in Europe and one in Australia [49] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the volatility in consumer purchasing patterns and the uncertain macroeconomic environment [17] - The company is cautiously optimistic about maintaining positive momentum in comparable sales and improving top and bottom line results in Q1 2025 [41][44] - Despite store closures, management believes total sales will grow in fiscal 2025 [45] Other Important Information - The company ended the year with $146.6 million in inventory, up 13.8% compared to the previous year [36] - Cash and current marketable securities were$ 147.6 million, with no debt on the balance sheet [34][35] Q&A Session Summary Question: Impact of tariffs on private label business - Management discussed efforts to diversify sourcing to mitigate tariff impacts, noting that approximately 50% of North America receipts were concentrated in China [54][55][56] Question: Leverage points on EBITDA versus SG&A - Management indicated that they expect to grow sales and operating profit, with good opportunities for gross margin growth and managing SG&A expenses in line with sales [60][62] Question: Ability to grow operating margin on low single-digit comp - Management confirmed that it is possible to grow operating margin even with low single-digit comparable sales growth [67][68]