Zumiez Inc. reported fourth-quarter earnings rose 28.0 percent.
Total net sales for the fourth quarter ended February 1, 2020 (13 weeks) increased 7.9 percent to $328.8 million from $304.6 million in the quarter ended February 2, 2019 (13 weeks). Comparable sales for the thirteen weeks ended February 1, 2020, increased 6.4 percent compared to a comparable sales increase of 3.9 percent for the thirteen weeks ended February 2, 2019.
Net income for the fourth quarter of fiscal 2019 was $37.9 million, or $1.48 per diluted share, compared to net income of $29.6 million, or $1.18 per diluted share in the fourth quarter of the prior fiscal year. Results were above Wall Street’s consensus estimate of $1.38.
Fourth-quarter fiscal 2019 results include $2.0 million in net sales related to the recognition of deferred revenue due to changes in its STASH loyalty program estimated redemption rate, which was worth approximately 6 cents in earnings per share.
Total net sales for fiscal 2019 (52 weeks) ended February 1, 2020, increased 5.7 percent to $1.034 billion from $978.6 million in fiscal 2018 (52 weeks) ended February 2, 2019. Comparable sales for the fifty-two week period ended February 1, 2020, increased 4.9 percent compared to the same fifty-two week period ended February 2, 2019. Net income in fiscal 2019 increased 48.0 percent to $66.9 million, or $2.62 per diluted share, compared to the net income in the prior fiscal year of $45.2, or $1.79 per diluted share.
At February 1, 2020, the company had cash and current marketable securities of $251.2 million compared to cash and current marketable securities of $165.3 million at February 2, 2019. 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, “Our strong fourth quarter and full-year performance underscores the power of our business model. Through our unwavering commitment to providing best-in-class service and great product to our customers, we have generated 14 consecutive quarters of positive comparable sales gains. Our success in progressively increasing sales with double-digit growth in profitability in recent years has been driven by the disciplined execution of our merchandising strategies, investments in people and technology, the benefits of our localized fulfillment structure, and the implementation of numerous efficiency and cost-saving initiatives.
“While the first quarter is off to a good start, these are challenging times with a high degree of uncertainty driven by the pandemic. However, with over $250 million in cash and short term investments and no debt on our balance sheet, we are well-positioned to navigate this environment. With respect to coronavirus, our focus is first and foremost on the safety of our customers and employees. We are monitoring this fluid situation and intend to remain flexible and agile in adjusting inventory, expense and capital allocation plans accordingly.”
February 2020 Sales
The company’s comparable sales increased 5.8 percent for the four-week period ended February 29, 2020, compared to a comparable sales decrease of 3.8 percent for the four-week period ended March 2, 2019.
Fiscal 2020 First Quarter Outlook
The company is introducing guidance for the three months ending May 2, 2020. Net sales are projected to be in the range of $219 million to $223 million including anticipated comparable sales growth of between 2.0 percent and 4.0 percent. Consolidated operating margins are expected to between 0.4 percent and 1.3 percent resulting in net income per diluted share of approximately $0.01 to $0.07. This guidance does not take into account some of the macro factors going on globally including the impact of the coronavirus.
The company currently intends to open approximately 20 new stores in fiscal 2020, including up to 8 stores in North America, 8 stores in Europe and 4 stores in Australia.
Photo courtesy Zumiez
