Zumiez Inc. reported earnings rose 10.7 percent in the third quarter to $10.7 million, or 43 cents per share, compared to net income of $9.7 million, or 36 cents, a year ago. Results exceeded consensus estimates of 36 cents a share.
Total net sales for the third quarter ended October 29, 2016 (13 weeks) increased 8.4 percent to $221.4 million from $204.3 million in the quarter ended October 31, 2015 (13 weeks). Comparable sales increased 4 percent compared to a comparable-sales decrease of 7.3 percent in the same period a year ago.
Total net sales for the nine months increased 1.9 percent to $572.6 million from $561.7 million a year ago. Comparable sales decreased 2.5 percent compared to a comparable sales decrease of 3.4 percent in the prior year. Net income for the first nine months of fiscal 2016 was $7.7 million, or 31 cents per diluted share, compared to net income for the first nine months of the prior fiscal year of $15.6 million, or 55 cents per diluted share. Results for the first nine months of fiscal 2015 include approximately $1.5 million, or 4 cents per diluted share, for charges associated with the acquisition of Blue Tomato.
At October 29, 2016, the company had cash and current marketable securities of $49.2 million compared to cash and current marketable securities of $51.1 million at October 31, 2015. The decrease in cash and current marketable securities is a result of stock repurchases and capital expenditures, partially offset by cash generated through operations.
Rick Brooks, chief executive officer of Zumiez Inc., stated, “Our monthly comparable sales trend turned positive in September driven by a solid back-to-school selling season and continued to accelerate as the third quarter progressed. We are pleased with the increase in our top-line, which included positive growth in our men’s, accessories, and junior’s categories. Looking ahead, we believe that our current merchandise offering has us positioned to continue with strong results during the important holiday season. That said, we are proceeding prudently and managing expenses tightly in light of the headwinds currently facing the retail industry. Our primary focus remains on executing our strategic multi-year growth objectives and delivering increased shareholder value over the long-term.”
November 2016 Sales
Total net sales for the four-week period ended November 26, 2016 increased 10.3 percent to $69.3 million, compared to $62.8 million for the four-week period ended November 28, 2015. The company’s comparable sales increased 5.7 percent for the four-week period ended November 26, 2016 compared with a comparable-sales decrease of 13.8 percent for the four-week period ended November 28, 2015.
Fiscal 2016 Fourth Quarter Outlook
The company is introducing guidance for the three months ending January 28, 2017. Net sales are projected to be in the range of $258 million to $263 million resulting in net income per diluted share of approximately 60 cents to 66 cents. Wall Street’s consensus estimate for the fourth quarter is 64 cents. The guidance is based upon an anticipated comparable sales range of 3 percent to 5 percent for the fourth quarter of fiscal 2016.
