Zumiez Inc. reported revenues increased 22.7 percent to $129.9 million in the quarter ended April 30, 2011, driven by the addition of 48 new stores and comparable store sales growth of 12.9, which reflected 50.9 percent growth in e-commerce sales.
Gross profit increased 26.8 percent to $42.1 million, or 32.4 percent of net sales, compared with 31.3 percent in first quarter a year earlier. Selling, general and administrative expenses increase 13.7 percent to reach 26.8 percent of net sales, down 210 basis points from a year earlier. Operating margins rose 320 basis points to 5.6 percent.
The company ended the quarter with inventory of $70.4 million, which was up 11.6 percent from a year earlier. That was essentially flat on a per square foot basis, despite carrying over more winter inventory than a year ago. ZUMZ ended the quarter with $171.2 million of cash and cash equivalents, up 31 percent from a year earlier, and no debt.
The comps gain was primarily driven by an increase in dollars per transaction, partially offset by a decline in comp store transactions. Men's footwear, juniors, hard goods and accessories departments all generated positive same-store growth, while comp store sales of boy’s were negative.
The retailer continues to work with brands willing to develop new products for the junior market that will be exclusively to ZUMZ. Zumiez will continue to complement those offerings will private label products, which accounted for 18 percent of its sales in 2011, said CEO Rick Brooks.
ZUMZ issued guidance calling for net sales to reach $128 to $130 million in the second quarter ending July 28. The guidance assumes a comp store sales increase in the mid-single-digit range for the second quarter of fiscal 2012. It also accounts for relocation costs of $1.8 million, or 3 cents per diluted share, associated with the move to the ecommerce fulfillment center in Kansas and the relocation of corporate offices to Lynnwood from Everett, WA.
ZUMZ intends to open approximately 50 new stores in fiscal 2012, including up to 10 stores in Canada, with an opening cadence similar to fiscal 2011. Ultimately, ZUMZ thinks it can operate up to 700 stores in the United States and 70 in Canada and grow e-commerce from 7.7 percent to 10 percent of revenue.