Zumiez Inc. said total net sales for the second quarter (13 weeks) ended Aug. 2, 2008 increased by 12.5% to $92.3 million from $82.0 million reported in the second quarter a year ago.


The company posted net income for the quarter of $2.7 million, or 9 cents per diluted share versus $3.1 million, or 11 cents per diluted share in year earlier quarter. Comparable store sales decreased 1.7% for the second quarter of fiscal 2008 compared to an 11.6% increase a year earlier.

Total net sales for the first six months (26 week period) of fiscal 2008 increased by 13.4% to $171.0 million from $150.8 million reported in the first six months of the prior year. The company posted net income of $4.1 million, or 14 cents per diluted share in the first six months of 2008, versus $4.7 million, or 16 cents per diluted share in the prior year.


Comparable store sales decreased 1.3% for the first six months of fiscal 2008 compared to an increase of 11.4% for the first six months of fiscal 2007.

Net cash provided by operating activities in the first half of fiscal 2008 was $15.7 million compared to net cash used in operating activities of $6.7 million in the first half of fiscal 2007, driven largely by favorable changes in working capital.


“We continue to make positive strides in our ongoing efforts to give our customers a unique specialty retail experience, while controlling costs and effectively managing inventories during this very difficult operating environment,” said Rick Brooks, president and CEO of Zumiez Inc. “Due to this focus, we exceeded our earnings projection for the first six months of this year. We have opened 39 stores this year and continue to make the investments necessary to build the Zumiez chain to our goal of 800 stores.”


2008 Outlook


“That said, the macro environment remains challenging and retailers are becoming increasingly promotional,” Brooks continued. “Therefore, we believe it is prudent to adopt a more conservative outlook for the back half of the year.”


The company now expects diluted earnings per share of approximately 80 to 82 cents for fiscal 2008, compared to its previous expectation for diluted earnings per share of approximately 90 to 93 cents. This guidance is based on anticipated square footage growth of approximately 20% and on a mid-single digit to low-single digit comparable store sales decline for the second half of fiscal 2008.

 

















































































































































































































































ZUMIEZ INC.


CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS


(in thousands, except share and per share amounts)


(Unaudited)

 
  Three Months Ended
August 2,     August 4,  
2008 % of Sales 2007 % of Sales
Net sales $ 92,258 100.0 % $ 81,974 100.0 %
Cost of goods sold   62,155 67.4 %   53,783 65.6 %
Gross profit 30,103 32.6 % 28,191 34.4 %
 
Selling, general and administrative expenses   26,191 28.4 %   23,489 28.7 %
Operating profit 3,912 4.2 % 4,702 5.7 %
 
Interest income, net   495 0.6 %   327 0.4 %
Earnings before income taxes 4,407 4.8 % 5,029 6.1 %
 
Provision for income taxes   1,680 1.8 %   1,911 2.3 %
 
Net income $ 2,727 3.0 % $ 3,118 3.8 %
 
Basic net income per share $ 0.09 $ 0.11
 
Diluted net income per share $ 0.09 $ 0.11