Zumiez Inc. saw total net sales for the second quarter increase 41.5% to $55.8 million from $39.4 million reported in the same period last year. The company posted net income for the quarter of $1.6 million or 6 cents per diluted share versus $848,000 or 3 cents per diluted share in the second quarter of the prior fiscal year. Comparable store sales increased 12.6% for the quarter on top of an 11.3% gain last year.
Total net sales for the first six months (26 week period) of fiscal 2006 increased by 42.3% to $103.5 million from $72.8 million reported in the first six months of the prior year. The company posted net income of $2.8 million or $0.10 per diluted share in the first six months of 2006 versus $808,000 or $0.03 per diluted share in the prior year. Comparable store sales increased 15.8% for the first six months of fiscal 2006 compared to 11.6% for the first six months of fiscal 2005.
Rick Brooks, President and Chief Executive Officer of Zumiez Inc., stated, “We are pleased with our second quarter results, particularly our ability to generate same store sales gains in excess of 12% and a doubling of earnings per share. While the junior’s category has been relatively challenging, we anticipated that the business would slow due to lack of a clear fashion direction and have planned and are planning our inventory accordingly. Our strong brand and category diversity differentiates Zumiez from other retailers in the mall and gives us the flexibility to relatively quickly adjust our product mix to changing trends.”
During the quarter, Zumiez completed the acquisition of 19 Fast Forward stores. The company also opened 22 stores during the quarter and remains on track to open 42 new stores in fiscal 2006.
Mr. Brooks concluded, “I believe that we are well-positioned for back-to-school and note that it is important to recognize that the period stretches through August and well into September. Longer term, we will continue to leverage our strong brand, compelling business model, unique market position and significant store expansion opportunities to drive annual earnings growth towards our goal of 30%.”
2006 Outlook
The company stated that it is raising guidance for fiscal 2006 to 66 cents to 67 cents in diluted earnings per share. Weighted average diluted shares for the fiscal year are expected to be approximately 29,300,000.
ZUMIEZ INC.
CONDENSED STATEMENT OF INCOME
(in thousands, except share and per share data)
(Unaudited)
Three Months Ended Six Months Ended
----------------------- -----------------------
July 29, July 30, July 29, July 30,
2006 2005 2006 2005
----------- ----------- ----------- -----------
Net sales $ 55,756 $ 39,407 $ 103,541 $ 72,776
Cost of goods sold 36,981 26,633 69,500 50,155
----------- ----------- ----------- -----------
Gross margin 18,775 12,774 34,041 22,621
Selling, general and
administrative
expenses 16,780 11,502 30,576 21,332
----------- ----------- ----------- -----------
Operating profit 1,995 1,272 3,465 1,289
Interest income
(expense), net 231 78 583 34
Other income
(expense), net (16) 1 (16) 16
----------- ----------- ----------- -----------
Earnings before income
taxes 2,210 1,351 4,032 1,339
Provision for income
taxes 568 503 1,281 531
----------- ----------- ----------- -----------
Net income $ 1,642 $ 848 $ 2,751 $ 808
=========== =========== =========== ===========
Basic net income per
share $ 0.06 $ 0.03 $ 0.10 $ 0.03
=========== =========== =========== ===========
Diluted net income per
share $ 0.06 $ 0.03 $ 0.10 $ 0.03
=========== =========== =========== ===========
Weighted average shares
outstanding, Basic 27,396,890 26,573,784 27,299,864 24,592,152
Weighted average shares
outstanding, Diluted 28,903,588 28,213,112 28,768,373 26,231,480
