Zumiez Inc. on Thursday reported comparable sales for the third quarter ended November 2 increased 5.5 percent, up from a 4.8 increase in the year-ago quarter and the 13th straight quarter of positive comps.
Total net sales for the third quarter ended November 2, 2019 (13 weeks) increased 6.1 percent to $264.0 million from $248.8 million in the quarter ended November 3, 2018 (13 weeks). Comparable sales for the thirteen weeks ended November 2, 2019 increased 5.5 percent compared to a comparable sales increase of 4.8 percent for the thirteen weeks ended November 3, 2018. Net income for the third quarter of fiscal 2019 was $19.2 million, or $0.75 per diluted share, compared to net income of $13.8 million, or $0.55 per diluted share in the third quarter of the prior fiscal year.
Total net sales for the nine months (39 weeks) ended November 2, 2019 increased 4.6 percent to $705.4 million from $674.1 million reported for the nine months (39 weeks) ended November 3, 2018. Comparable sales increased 4.2 percent for the thirty-nine weeks ended November 2, 2019 compared to a comparable sales increase of 6.3 percent for the thirty-nine weeks ended November 3, 2018. Net income for the first nine months of fiscal 2019 was $29.0 million, or $1.14 per diluted share, compared to net income for the first nine months of the prior fiscal year of $15.6 million, or $0.62 per diluted share.
At November 2, 2019, the Company had cash and current marketable securities of $178.6 million compared to cash and current marketable securities of $127.9 million at November 3, 2018. The increase in cash and current marketable securities was driven by cash generated through operations partially offset by capital expenditures.
Rick Brooks, Chief Executive Officer of Zumiez Inc., stated, “We are very pleased with the third quarter performance and our teams continued ability to provide high-quality service to the customer. The third quarter represented our fourth consecutive strong back-to-school season, our 13th quarter of positive comparable sales gains and continued solid full price selling in each of our geographies that we operate. At the same time, the initiatives we’ve implemented aimed at creating efficiencies and generating savings throughout our organization contributed to our better than expected bottom line and allowed us to convert mid-single digit comparable sales into a 37.1 percent improvement in earnings per share. The holiday season is off to a good start and we are confident that our distinct approach to retailing combined with an operating model built around a singular cost structure has Zumiez well positioned to deliver record results in 2019 and generate increased shareholder value for years to come.”
Fiscal 2019 Fourth Quarter-to-date Sales
With the Thanksgiving holiday shifting a week later in 2019, the fiscal month of November has significant comparability issues with the prior year. Therefore, the Company is providing a comparable sales update for the period beginning November 3, 2019 through December 3, 2019 (quarter-to-date) compared with the same period in the prior year. Both years then include the full Black Friday weekend as well as Cyber Monday shipments. The Company’s comparable sales increased 3.3 percent for the 2019 fourth quarter-to-date period through December 3, 2019 compared with the same period in the prior year ending December 4, 2018.
Fiscal 2019 Fourth Quarter and Full Year Outlook
The company is introducing guidance for the three months ending February 1, 2020. Net sales are projected to be in the range of $314 to $320 million including anticipated comparable sales growth of between 2.0 percent and 4.0 percent. Consolidated operating margins are expected to between 12.5 percent and 13.0 percent resulting in net income per diluted share of approximately $1.26 to $1.32.
Based upon better than anticipated trends and performance year-to-date, the Company is raising its annual guidance. Fiscal 2019 comparable sales are now expected to increase approximately 4.0 percent and 4.5 percent compared to prior guidance of 2.0 percent to 4.0 percent. Diluted earnings per share are now projected to range from $2.38 to $2.46, up from previous guidance of $2.10 to $2.20.
Share Repurchase Authorization
On December 4, 2019, Zumiez Inc. approved the repurchase of up to an aggregate of $100 million of its Common Stock (the “Repurchase Program”). The repurchases will be made from time to time on the open market at prevailing market prices. The Repurchase Program is expected to continue through the fiscal year 2020 that will end on January 30, 2021, unless the time period is extended or shortened by the Board of Directors. The Repurchase Program supersedes all previously approved and authorized stock repurchase programs.