Zumiez Inc. will slow new store expansion to no more than 15% on a square footage basis compared to the current rate of 24% and reduce capital expenditures to approximately $28 million in fiscal 2009. The action sports retailer said a deteriorating retail environment had caused it to put its new store plans for the next fiscal year on hold. ZUMZ expects to open 55 new stores in the current fiscal year.
Sales rose 7.9% to $112.2 million from $104.0 million reported in the third quarter of 2007. Comparable store sales decreased 5.8% for the quarter compared to a 13.2% increase in the year earlier period.
Brooks said footwear has been the strongest performing department in 2008 with a low double digit comp increase. Accessories comps decreased in the low single digits and hard goods and apparel comps decreased in the mid-teen range.
The companys stores in California, Arizona, Florida, and Nevada continue to be “particularly challenging,” said CFO Trevor Lang. The Pacific Northwest and the Rocky Mountain proved challenging as well, while the Northeast and the Midwest performed relatively better.
The company continues to cut expenses in this troubled economy. “Our SG&A is growing about half the rate of our increase in square footage,” continued Brooks. “Our percent rent has come down as business has gotten tougher. Our merchandising cost as a percentage of sales has come down.”
Zumiez also updated its full year outlook, and now expects sales to be between $406 million and $410 million compared to the previous guidance of $418 million to $425 million. It also recently updated its outlook for diluted earnings per share to be in the range of 52 cents to 57 cents for the fiscal year ending Jan. 31, 2009.
