Zumiez, Inc. reported a loss in the third quarter ended October 28 on an 8.9 percent decline in sales but results topped the retailer’s guidance and sequential improvement was seen compared to the first two quarters of the year. Sales are down 4.6 percent so far in the current quarter.
Net sales for the third quarter ended October 28, 2023 (13 weeks) decreased 8.9 percent to $216.3 million from $237.6 million in the third quarter ended October 29, 2022 (13 weeks). Zumiez had projected sales in the range of $211 to $216 million.
Net loss in the third quarter of fiscal 2023 was $2.2 million, or 12 cents per diluted share, compared to net income of $6.9 million, or 36 cents per diluted share, in the third quarter of the prior fiscal year. Zumiez had projected a loss in the range of 15 cents to 25 cents.
Total net sales for the nine months (39 weeks) ended October 28, 2023 decreased 12.5 percent to $593.7 million from $678.3 million reported for the nine months (39 weeks) ended October 29, 2022. Net loss for the first nine months of fiscal 2023 was $29.1 million, or $1.51 per diluted share, compared to net income for the first nine months of fiscal 2022 of $9.6 million, or $0.49 per diluted share.
At October 28, 2023, the company had cash and current marketable securities of $135.8 million compared to cash and current marketable securities of $141.1 million at October 29, 2022. The decrease was primarily driven by capital expenditures partially offset by cash flow from operating activities.
Rick Brooks, CEO of Zumiez, Inc., stated, “Third-quarter results came in just ahead of our guidance for sales and earnings as we saw sequential improvement in the year-over-year sales comparisons from the first two quarters of 2023. Given the challenging macroeconomic backdrop, we are encouraged by the strength of newer brand introductions and fashion trends that we look to capitalize upon in the important holiday season. While 2023 has certainly been difficult, the adjustments we’ve made to our merchandise assortment and our steadfast commitment to providing consumers with superior service and a highly differentiated shopping experience will continue to separate us from the competition and position Zumiez to recapture operating margin as our sales recover.”
Fourth Quarter To-Date
Total fourth quarter-to-date total sales for the 31 days ending November 28, 2023 decreased 4.6 percent, compared with the same 31-day time period in the prior year ended November 29, 2022. Total comparable sales for the 31-day period ending November 28, 2023 decreased 6.0 percent from the comparable period in the prior year.
Fiscal 2023 Fourth Quarter Outlook
The company is introducing guidance for the three months ending February 3, 2024. Net sales are projected to be in the range of $275 to $281 million inclusive of the 53rd week. Consolidated operating margins are expected to be between 1.5 percent and 2.5 percent resulting in earnings per diluted share of approximately $0.24 to $0.34. The company currently intends to open 19 new stores in fiscal 2023, including up to 5 stores in North America, 10 stores in Europe and 4 stores in Australia.
Photo courtesy Zumiez
