Zumiez, Inc. reported sales fell 21 percent in the first quarter ended April 30 against tough year-ago comparisons but arrived at the high end of guidance. Earnings came in below guidance due to labor, shipping and logistics costs as well as a shift in the timing of marketing and training investments.
Net sales for the first quarter ended April 30, 2022 (13 weeks) decreased 20.9 percent to $220.7 million from $279.1 million in the first quarter ended May 1, 2021 (13 weeks). Zumiez had guided sales to b between $215 million and $221 million.
Compared to the pre-pandemic first quarter ended May 4, 2019 (13 weeks), first quarter 2022 net sales increased 3.6 percent.
Net loss for the first quarter of fiscal 2022 was $(0.4) million, or $(0.02) per diluted share, compared to net income of $26.4 million, or $1.03 per diluted share, in the first quarter of the prior fiscal year. Zumiez had guided EPS to be break-even to positive 10 cents per diluted share.
Net income for the first quarter of 2019 was $0.8 million, or $0.03 per diluted share.
Rick Brooks, CEO, Zumiez Inc., stated, “Our first quarter top-line performance came in on the high side of our expectations for the quarter as we experienced another period of full-price selling across each of our geographic regions. As forecasted, the first quarter was meaningfully impacted by the anniversary of the record U.S. stimulus in early 2021 as well as the impacts of inflation and overall competition for the discretionary dollar. On the expense side, we experienced some headwinds in the first quarter of this year around labor, shipping and logistics costs as well as a shift in the timing of certain marketing and training investments that resulted in us missing our EPS guidance. As we look to the balance of the year, we are cognizant that the current macroeconomic environment is likely to deteriorate further and near-term year-over-year comparisons remain challenging. However, we have a strong balance sheet and remain confident in our consumer-centric growth strategy and flexible operating model that has proven resilient to a variety of challenges over time. Despite the economic backdrop, we believe the company remains well-positioned to capture share in each of our global markets while we continue advancing our strategic initiatives and generating value for our shareholders.”
At April 30, 2022, the company had cash and current marketable securities of $173.0 million compared to cash and current marketable securities of $400.4 million at May 1, 2021. The decrease was driven by share repurchases and capital expenditures partially offset by cash generated through operations. The company repurchased 1.9 million shares in the first quarter of 2022 at an average cost of $43.51 per share and a total cost of $83.3 million which fully completed the existing authorized program. The company currently has no open repurchase authorizations.
May 2022 Sales
Net sales for the four-week period ended May 28, 2022 decreased 20.9 percent compared to the four-week period ended May 29, 2021 and increased 3.3 percent compared to the four-week period ended June 1, 2019.
Fiscal 2022 Second Quarter Outlook
The company is introducing guidance for the three months ending July 30, 2022. Net sales are projected to be in the range of $232 to $239 million, down from $268.7 million a year ago. Consolidated operating margins are expected to be between 5.0 percent and 6.5 percent resulting in earnings per diluted share of approximately 45 cents to 55 cents against 94 cents a year ago. The company plans to open approximately 34 new stores in fiscal 2022, including up to 15 stores in North America, 14 stores in Europe and 5 stores in Australia.
Photo courtesy Zumiez
