On September 5, 2024, Zumiez Inc (ZUMZ, Financial) released its 8-K filing for the fiscal 2024 second quarter, showcasing a notable improvement in financial performance. Zumiez Inc is a United-States-based specialty retailer engaged in the sale of apparel, footwear, accessories, and hard goods, operating under the brands Zumiez, Fast Times, and Blue Tomato. The company operates through both physical stores and websites, with the majority of its stores located in the U.S.
Performance Overview
Zumiez Inc reported net sales of $210.2 million for the second quarter ended August 3, 2024, an 8.1% increase from $194.4 million in the same period last year. Comparable sales rose by 3.6%, driven by a positive shift in the retail calendar, which contributed approximately 530 basis points to net sales growth. However, this calendar shift is expected to negatively impact third-quarter net sales growth.
The company reported a net loss of $0.8 million, or $0.04 per share, a significant improvement from the net loss of $8.5 million, or $0.44 per share, in the prior year's second quarter. This improvement was attributed to better merchandise assortments and enhanced customer engagement tactics.
Financial Achievements and Metrics
Zumiez Inc's gross margin increased by 250 basis points to 34.2%, up from 31.7% in the previous year. This improvement highlights the company's effective cost management and pricing strategies. The operating loss narrowed to $0.4 million from $10.5 million, reflecting better operational efficiency.
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Net Sales | $210.2 million | $194.4 million |
| Gross Margin | 34.2% | 31.7% |
| Net Loss | $0.8 million | $8.5 million |
| Loss Per Share | $0.04 | $0.44 |
Balance Sheet and Cash Flow
As of August 3, 2024, Zumiez Inc had cash and current marketable securities of $127.0 million, down from $140.0 million at the same time last year. This decrease was primarily due to share repurchases and capital expenditures, partially offset by cash flow from operations. The company repurchased 0.9 million shares during the quarter at an average cost of $20.55 per share, totaling $19.4 million.
CEO Commentary
"We experienced a noticeable acceleration in our sales trend as the second quarter unfolded, with July North America comparable sales increasing in the high-single digits. The work our merchandise teams have done refining our apparel and footwear assortments combined with enhanced customer engagement tactics from our in-store and online sales associates led to better than expected second quarter results and a strong back-to-school season in North America," said Rick Brooks, Chief Executive Officer of Zumiez Inc.
Third Quarter Outlook
For the third quarter ending November 2, 2024, Zumiez Inc projects net sales to be in the range of $221 to $225 million, representing growth of between 2% and 4% from the third quarter of the prior year. Adjusting for the calendar shift, net sales are expected to grow between 7% and 9%. Consolidated operating margins are expected to be between 0.2% and 1.2%, with earnings per share results ranging from a loss of $0.04 to an income of $0.06.
Zumiez Inc plans to open approximately 9 new stores in fiscal 2024, including up to 3 stores in North America, 3 in Europe, and 3 in Australia, while closing approximately 25 stores by the end of the year.
For more detailed information, please refer to the full 8-K filing.
Explore the complete 8-K earnings release (here) from Zumiez Inc for further details.
