Zumiez Q1 Profit Flat, But Beats Estimate

In Industry News, Reports, What's New by Jeff PrineLeave a Comment

From the Zumiez spring lookbook

From the Zumiez spring lookbook

Lynnwood, WA—Zumiez Inc. reported last week that flat first quarter profit, higher expenses and narrowed margins. Still, the board sport apparel and accessories retailer managed to beat analysts’ estimate.

For the quarter ended May 3, Zumiez posted net profit of $2.5 million, or 9 cents a share, compared to $2.5 million or 8 cents a share, in the year-ago period. (Included was about $600,000, or 1 cent a share, for charges associated with the acquisition of Blue Tomato).

‘Full Price Selling’

Adjusted earnings were 10 cents a share, double the 5 cents share analysts had expected.

Net sales grew 10% to $162.93 million, ahead of analysts’ average estimate for $159.21 million in sales. Comparable store sales were up 1.8% compared to a decrease of 0.7% a year ago.

“Our merchandise and selling strategies helped deliver better than expected first quarter results, including positive comps, and continue to distinguish Zumiez as the leading global action sports lifestyle retailer,” said Rick Brooks, chief executive. “The investments we’ve made in our people and systems including expanding our digital capabilities are allowing us to better meet the needs of our North American and European customers and supporting full price selling in a challenging retail environment.”

Gross margin narrowed to 31% from 32.3% in first quarter 2013. Meanwhile, operating margin edged down to 2.3% from 2.7%.

For its second quarter, Zumiez forecast net income per share of about 12 to 16 cents a share (again including a 2 cents a share charge associated with its Blue Tomato acquisition.) Net sales were projected at 167 million to $171 million with comp store sales in the low single-digit decrease to flat for the quarter.

Analysts expect Zumiez to report earnings of 18 cents a share on revenues of $170.77 million.