Zumiez, Inc. reported a loss in the first quarter ended April 29 as sales declined 17 percent. Results were in line with guidance with the weakness blamed on weak demand and the promotional environment. For the current quarter, another loss is expected on a sales decline of about 14 percent.
Net sales for the first quarter ended April 29, 2023 (13 weeks) decreased 17.1 percent to $182.9 million from $220.7 million in the first quarter ended April 30, 2022 (13 weeks). Net loss in the first quarter of fiscal 2023 was $18.4 million, or 96 cents, compared to a net loss of $0.4 million, or 2 cents, in the first quarter of the prior fiscal year.
Sales of $182.9 million compared with company guidance in the range of $178 to $184 million. The loss of 96 cents a share compares with guidance calling for a loss between 85 cents and 95 cents.
At April 29, 2023, the company had cash and current marketable securities of $155.3 million compared to cash and current marketable securities of $173.0 million at April 30, 2022. The decrease was driven by capital expenditures of $27.5 million over this time period, offset by $11.2 million provided by operating activities.
Rick Brooks, chief executive officer of Zumiez Inc., stated, “Our first quarter operating results were in-line with our outlook and reflect the significant change in consumer purchasing behavior that has occurred in the U.S. over the past year. While the domestic demand environment and heightened promotional activity have put pressure on our full-price selling model, we remain confident that the strong connections we’ve forged with our customers through Zumiez’s distinct brand culture, diverse and differentiated merchandise offering, and world-class service have us well positioned for accelerated market share gains when we emerge from the current economic cycle. At the same time, we continue to expand our presence and evolve our capabilities in Europe and Australia and are encouraged by our momentum in these regions and the global foundation we are building for long-term, profitable growth.”
May 2023 Sales
Net sales for the four-week period ended May 27, 2023 decreased 12.8 percent compared to the four-week period ended May 28, 2022. Comparable sales for the four-week period ending May 27, 2023 decreased 14.3 percent from the comparable period in the prior year.
Fiscal 2023 Second Quarter Outlook
The company is introducing guidance for the three months ending July 29, 2023. Net sales are projected to be in the range of $187 to $192 million. Loss per share is expected to be between 63 cents to 73 cents. In the 2022 second quarter, sales were $220 million on earnings of 16 cents per share.
The company currently intends to open approximately 23 new stores in fiscal 2023, including up to eight stores in North America, 10 stores in Europe and five stores in Australia.
Photo courtesy Zumiez
