Zumiez, Inc. reported net sales for the second quarter ended August 3 increased 8.1 percent to $210.2 million from $194.4 million in the second quarter ended July 29, 2023. Comparable sales for the quarter increased 3.6 percent year-over-year (y/y). The shift in the retail calendar positively impacted Zumiez’s second-quarter results as some normal August back-to-school sales were pulled forward into Q2, growing net sales by approximately 530 basis points. The shift will negatively affect net sales growth in the third quarter.
Comparable sales growth, as reported by Zumiez, is adjusted for the calendar shift and provides a more accurate measure of operating performance.
Net loss in the second quarter of fiscal 2024 was $0.8 million, or a loss of 4 cents per share, compared to a net loss of $8.5 million, or 44 cents per share, in the second quarter last year.
Total net sales for the six months (26 weeks) ended August 3, 2024 increased by 2.7 percent to $387.6 million from $377.3 million reported for the six months (26 weeks) ended July 29, 2023. The retail calendar shift positively impacted net sales growth by approximately 310 basis points year-to-date. Comparable sales increased 0.8 percent for the twenty-six weeks ended August 3, 2024. Net loss for the first six months of fiscal 2024 was $17.6 million, or $0.91 per share, compared to a net loss for the first six months of fiscal 2023 of $26.9 million, or $1.40 per share.
On August 3, 2024, the company had cash and current marketable securities of $127.0 million, compared to $140.0 million on July 29, 2023. The decrease was primarily driven by 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 and a total cost of $19.4 million.
Rick Brooks, chief executive officer of Zumiez, Inc., stated, “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. With back-to-school a good indicator for holiday demand in the past, we are encouraged about our prospects for growth over the remainder of fiscal 2024.
“Looking farther ahead, we are confident that our global customer-centric operating model has the company positioned to continue building on the progress we’ve made towards delivering enhanced value for our shareholders in the years to come,” concluded Brooks.
Third Quarter To-Date
Third quarter-to-date net sales for the 30 days ending September 2, 2024 increased 6.8 percent compared to the 30-day period in the prior year ended August 28, 2023. Total comparable sales for the 30-day period ending September 2, 2024, adjusted to exclude the impact of the calendar shift, were up 12.1 percent from the comparable period in the prior year.
Fiscal 2024 Third Quarter Outlook
Zumiez is introducing guidance for the three months ending November 2, 2024, projecting net sales in the range of $221 million to $225 million, representing a growth of 2 percent and 4 percent from the third quarter in the prior year. Adjusted for the impact of the calendar shift, the company expects net sales to grow between 7 percent and 9 percent compared to the same weeks in the prior year. Consolidated operating margins are expected to be between 0.2 percent and 1.2 percent, with earnings per share resulting in a loss of ($0.04) and income of $0.06.
The company reported that it intends to open approximately nine new stores in fiscal 2024 (three in North America, three in Europe, and three in Australia) and close approximately 25 stores by the end of 2024.
Image courtesy Zumiez
