Zumiez Posts 34% Q1 Sales Increase; Comps Up 12%

Zumiez Inc. reported total net sales for the first quarter ended April 30, 2005 increased by 34.4% to $33.4 million from $24.8 million reported in the prior year. The company posted a net loss for the quarter of $40,000 or 0 cents per diluted share versus a net loss of $678,000 or 6 cents per diluted share in the first quarter of the previous year. Comparable store sales increased 12.1% for the first quarter of fiscal 2005 compared to 8.3% in the first quarter of fiscal 2004.

Rick Brooks, President and Chief Executive Officer of Zumiez Inc., stated “Our solid first quarter performance represents a great way to start the new fiscal year. We achieved strong operating gains driven by new store openings, comparable store sales increases, and operating margin expansion. We believe these results are a testament to the strength of our retail concept and underscore our ability to effectively reach our core consumer.”

On May 5, 2005, the company completed an initial public offering of 3,593,750 shares of common stock at a price to the public of $18.00 per share, of which 1,875,000 shares were sold by the company and 1,718,750 shares were sold by certain selling shareholders, including 468,750 shares that were sold by the selling shareholders pursuant to the underwriters’ over-allotment option. Upon completing the offering, the company and the selling shareholders received net proceeds of approximately $29.7 million and $28.8 million, respectively. The company intends to use the proceeds together with cash flow from operations to fund new store openings, store improvements, infrastructure improvements, and for working capital and other general corporate purposes.

Mr. Brooks continued, “We were very pleased with the successful completion and performance of our IPO. We are also excited about the opportunity this gives us to achieve our growth potential and create value for all stakeholders of the company.”

For fiscal 2005, the company plans to open 35 new stores. In the first quarter, Zumiez opened 6 new stores and is on plan for store openings for the remainder of the year.

Mr. Brooks concluded, “Zumiez has become a true lifestyle retailer within the mall with a high-energy concept that appeals to a broad base of young consumers. We believe that our unique mix of branded merchandise, our hard-goods assortment, and the compelling visual merchandising of our stores gives us great legitimacy with this highly savvy consumer and differentiates us from our peers. With 146 stores, a very compelling unit economics proposition, and now significant capital resources, we are well-positioned and focused on fulfilling our many opportunities for growth.”

ZUMIEZ INC.

CONDENSED
STATEMENT OF INCOME

(unaudited)

in $000’s, except
share and per share data)

FIRST QUARTER
ENDED