07 Sep Zumiez Q2 Handily Beats Guidance
Zumiez Inc. reported earnings of $4.4 million, or 17 cents a share, rebounding from a loss of $0.6 million, or 2 cents, in the second quarter of the prior fiscal year. Earnings came in well ahead of company guidance calling earnings between 4 cents and 9 cents.
Sales in the quarter ended August 4 increased 13.9 percent to $219.0 million from $192.2 million in the quarter ended July 29, 2017 (13 weeks). Comparable sales for the thirteen weeks ended August 4, 2018 increased 6.3 percent compared to a comparable sales increase of 4.7 percent for the thirteen weeks ended July 29, 2017.
Zumiez had projected sales would arrive in the range of $213 million to $217 million with comp growth between 3.0 percent and 5.0 percent.
Total net sales for the six months (26 weeks) ended August 4, 2018 increased 13.9 percent to $425.3 million from $373.4 million reported for the six months (26 weeks) ended July 29, 2017. Comparable sales increased 7.2 percent for the twenty-six weeks ended August 4, 2018 compared to a comparable sales increase of 3.3 percent for the twenty-six weeks ended July 29, 2017. Net income for the first six months of fiscal 2018 was $1.8 million, or $0.07 per diluted share, compared to a net loss for the first six months of the prior fiscal year of $5.1 million, or $0.21 per diluted share.
At August 4, 2018, the company had cash and current marketable securities of $132.9 million compared to cash and current marketable securities of $70.7 million at July 29, 2017. The increase in cash and current marketable securities was driven by cash generated through operations partially offset by capital expenditures.
Rick Brooks, chief executive officer of Zumiez Inc., stated, “We delivered our strongest second quarter in several years. Our differentiated merchandise offering combined with our authentic brand positioning and seamless multi-channel shopping experience continue to drive robust comparable sales gains. We also expanded product margins by 30 basis points through increased full price selling and meaningfully leveraged our expenses on higher sales. The broad based improvements across our business fueled a marked improvement in profitability compared with a year ago. We are very encouraged by our recent performance, and with the second half of the year off to a solid start, we are heading into our busiest selling season with great momentum.”
August 2018 Sales
Total net sales for the four-week period ended September 1, 2018 increased 9.0 percent to $107.4 million, compared to $98.6 million for the four-week period ended August 26, 2017. The company’s comparable sales increased 9.5 percent for the four-week period ended September 1, 2018 compared to a comparable sales increase of 7.4 percent for the four-week period ended August 26, 2017.
Fiscal 2018 Third Quarter & Full Year Outlook
The company is introducing guidance for the three months ending November 3, 2018. Net sales are projected to be in the range of $247 to $252 million including anticipated comparable sales growth of between 4.0 percent and 6.0 percent. Consolidated operating margins are expected to between 6.5 percent and 7.0 percent resulting in net income per diluted share of approximately $0.45 to $0.51. The company currently intends to open approximately 13 new stores in fiscal 2018, including up to 5 stores in the United States, 7 stores in Europe and 1 store in Australia.