Zumiez Inc. saw total net sales for the third quarter ended Nov. 1, 2008 increased by 7.9% to $112.2 million from $104.0 million reported in the third quarter ended Nov. 3, 2007. The company posted net income for the quarter of $6.8 million or 23 cents per diluted share versus $8.1 million or 28 cents per diluted share in the third quarter of the prior fiscal year. Comparable store sales decreased 5.8% for the third quarter of fiscal 2008 compared to a 13.2% increase in the third quarter of fiscal 2007.
Total net sales for the first nine months of fiscal 2008 increased by 11.1% to $283.2 million from $254.8 million reported in the first nine months of the prior year. The company posted net income of $10.9 million or 37 cents per diluted share in the first nine months of 2008 versus $12.9 million or $44 cents per diluted share in the prior year. Comparable store sales decreased 3.2% for the first nine months of fiscal 2008 compared to an increase of 12.2% for the first nine months of fiscal 2007.
Net cash provided by operating activities in the first nine months of fiscal 2008 was $19.8 million compared to net cash used in operating activities of $0.6 million in the first nine months of fiscal 2007, driven by favorable changes in working capital.
CEO Rick Brooks stated: “While our third quarter earnings performance was in-line with expectations, we did experience sales and product margins during September and October that were below our year-to-date trends through August. Given the recent economic events and their impact on the retail industry, namely a slowdown in traffic levels and a heightened promotional environment, we recently adopted lowered sales and earnings expectations for the remainder of 2008. We still believe that our merchandise mix continues to be one of the most diverse and compelling in the industry and that our stores remain a destination for our consumers.”
2008 Outlook
The company recently updated its full year 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. This guidance is based on an anticipated opening of 58 new stores and a negative mid-teen comparable store sales decline for the fourth quarter of fiscal 2008.
| ZUMIEZ INC. | ||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||
| (in thousands, except share and per share amounts) | ||||||||||||
| (Unaudited) | ||||||||||||
| Three Months Ended | ||||||||||||
| November 1, | November 3, | |||||||||||
| 2008 | % of Sales | 2007 | % of Sales | |||||||||
| Net sales | $ | 112,245 | 100.0 | % | $ | 104,045 | 100.0 | % | ||||
| Cost of goods sold | 72,982 | 65.0 | % | 65,537 | 63.0 | % | ||||||
| Gross profit | 39,263 | 35.0 | % | 38,508 | 37.0 | % | ||||||
| Selling, general and administrative expenses | 28,879 | 25.7 | % | 25,786 | 24.8 | % | ||||||
| Operating profit | 10,384 | 9.3 | % | 12,722 | 12.2 | % | ||||||
| Interest income, net | 576 | 0.5 | % | 420 | 0.4 | % | ||||||
| Other income | 36 | – | 2 | – | ||||||||
| Earnings before income taxes | 10,996 | 9.8 | % | 13,144 | 12.6 | % | ||||||
| Provision for income taxes | 4,178 | 3.7 | % | 4,995 | 4.8 | % | ||||||
| Net income | $ | 6,818 | 6.1 | % | $ | 8,149 | 7.8 | % | ||||
| Basic net income per share | $ | 0.23 | $ | 0.28 | ||||||||
| Diluted net income per share | $ | 0.23 | $ | 0.28 | ||||||||
|
Weighted average shares used in computation |
||||||||||||
| Basic | 29,172,869 | 28,862,951 | ||||||||||
| Diluted | 29,373,990 | 29,554,774 | ||||||||||
