Zumiez Inc. reported total net sales for the second quarter (13 weeks) ended July 30, 2005 increased by 28.7% to $39.4 million from $30.6 million reported in the second quarter of the prior year. The company posted net income for the quarter of $848,000 or 6 cents per diluted share versus net income of $239,000 or 2 cents per diluted share in the second quarter of the prior year. Comparable store sales increased 11.3% for the second quarter of fiscal 2005 compared to 6.8% in the second quarter of fiscal 2004.
Total net sales for the first six months (26 week period) of fiscal 2005 increased by 31.3% to $72.8 million from $55.4 million reported in the first six months of the prior year. The company posted net income of $808,000 or 6 cents per diluted share in the first six months of 2005 versus a net loss of $(439,000) or (4 cents) per diluted share in the prior year. Comparable store sales increased 11.6% for the first six months of fiscal 2005 compared to 7.5% for the first six months of fiscal 2004.
Rick Brooks, president and chief executive officer of Zumiez Inc., stated, “Our results for the second quarter, which exceeded expectations, were driven by new store openings, double digit comparable store sales gains and continued operating margin expansion. We were pleased with the strong performance of our new stores, further highlighting the expansion opportunities that exist for Zumiez on a national basis. ”
Mr. Brooks continued, “Our store sales team, store management teams, and product teams all made contributions to our performance. Our entire organization continues to focus on creating a unique experience and we believe this is resonating with our customers.”
For fiscal 2005, the company plans to open 35 new stores. In the first two quarters of fiscal 2005, Zumiez opened 11 new stores and remains on plan for its store openings for the remainder of the year.
Mr. Brooks concluded, “We believe that Zumiez is a leading lifestyle retailer with a compelling mix of branded merchandise, a strong hard goods assortment and a “controlled chaos” environment that appeals to teenagers and young adults. Additionally, we feel that our unique culture allows us to react quickly to product and fashion cycles to meet the needs of today's youthful minded consumer. We continue to believe that we have considerable growth prospects and we are dedicated to fully capitalizing on the many opportunities that lie ahead.”
2005 Outlook
The company stated that it expects diluted earnings per share to range from 80 cents to 82 cents in fiscal 2005 and that weighted average diluted shares for the remainder of the year are expected to be approximately 15,050,000 shares. The company also stated that it believes that its projected long-term earnings growth rate of 30% continues to be very achievable.
ZUMIEZ INC.
CONDENSED STATEMENT OF INCOME
(in thousands, except share and per share data)
(Unaudited)
Three Months Ended Six Months Ended
----------------------- -----------------------
July 30, July 31, July 30, July 31,
2005 2004 2005 2004
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Net sales $ 39,407 $ 30,615 $ 72,776 $ 55,444
Cost of goods sold 26,636 21,519 50,162 40,222
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Gross margin 12,771 9,096 22,614 15,222
Selling, general and
administrative
expenses 11,499 8,573 21,324 15,629
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Operating profit
(loss) 1,272 523 1,290 (407)
Interest income
(expense), net 78 (110) 48 (156)
Other income 1 2 1 2
----------- ----------- ----------- -----------
Earnings (loss) before
income taxes 1,351 415 1,339 (561)
Provision (benefit)
for income taxes 503 176 531 (122)
----------- ----------- ----------- -----------
Net income (loss) $ 848 $ 239 $ 808 $ (439)
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Basic net income
(loss) per share $ 0.06 $ 0.02 $ 0.07 $ (0.04)
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Diluted net income
(loss) per share $ 0.06 $ 0.02 $ 0.06 $ (0.04)
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