Zumiez Inc. reported that the weather woes affecting the general retail
environment had the same affects on the company’s third quarter,
especially hampering sales of cold weather products, in both hardgoods
and softgoods. However, the company still posted its usual double-digit
sales and comps increases, while net income grew in the double-digits,
as well. The company also announced it planned to open stores in
Virginia and Massachusetts next year as part of its continued 20%
annual square footage growth.

Third quarter net sales jumped 26.5% to $104.0 million from $82.3
million last year as comparable store sales increased 13.2%,
accelerating from 10.7% growth in the year-ago quarter. On a conference
call with analysts, management reported that had winter-related
merchandise sales been flat, the monthly comp result would have
increased “close to 10%,” rather than the 5.1% increased reported.
Additionally, the Thanksgiving holiday weekend saw sales for the
retailer comp up in the mid-teens. The company said that all of its
regions comped positive for the quarter and year-to-date periods, but
that it did have issues where the warm weather and lack of snow
impacted sales.

Gross profit for the third quarter increased 30 basis points to 37.1%
of net sales compared to 36.8% of net sales in the third quarter of
last year. The company posted net income for the quarter of $8.1
million or 28 cents per diluted share, growing 19.1% from $6.8 million
or 24 cents per diluted share in the third quarter of the prior fiscal
year.
Looking ahead, Zumiez expects fiscal 2007 sales to range from $384
million to $388 million on an upper single-digit comp increase. The
company is reiterating its diluted earnings per share guidance for
fiscal 2007 of 92 cents to 94 cents.

During the quarter, ZUMZ opened 17 stores to bring the store base to
283 at quarter-end. Subsequent to quarter-end, the company opened its
last two stores for this fiscal year.