Zumiez, Inc. reported comps slipped 8% in the third fiscal quarter of 2009 but new stores drove revenues to minimal growth. Sequentially, management said sales trends were promising as the back-to-school quarter resulted in same-store sales that were better than most analysts predicted after the company posted comps that were down low-20’s in the second quarter.
On a conference call with analysts, management for the Everett, WA-based retailer said improving comps in the company’s Western region had helped offset weakness elsewhere. California, which is by far Zumiez’s biggest state, had the second best comps in the 13-state Western region. Overall, same-store sales in the Western region, which represented about 54% of comp sales, declined 10%. Stores in the South, Midwest and Northeast comped down about 6.5%. Transactions accounted for nearly all of the same-store sales declines. Footwear posted a “modest” comp gain for the quarter but was more than offset by weakness in all other departments. A 40 basis point improvement in gross margin was driven primarily by a 60 basis point improvement from product growth margins.
The company’s direct channel posted a sales increase of more than 50% for the quarter, which management called an “acceleration” from the front half of the year.
Regarding outlook, management said they expect Q4 sales to be in the range of $122 million to $126 million, with comps down in the high- to mid-singles range. The week of Thanksgiving and the three weeks surrounding Christmas are expected to represent about 50% of the quarter’s comp store sales and are expected to be down low-single digits. Non-peak weeks are expected to be down in the mid-teens.
