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Zumiez Inc. Announces Fiscal 2021 Third Quarter Results

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  • ZUMZ

Net Sales Increased 6.8% to $289.5 Million
Diluted Earnings Per Share Increased 7.8% to $1.25

LYNNWOOD, Wash., Dec. 02, 2021 (GLOBE NEWSWIRE) -- Zumiez Inc. (NASDAQ: ZUMZ) a leading specialty retailer of apparel, footwear, equipment and accessories for young men and women, today reported results for the third quarter ended October 30, 2021.

Net sales for the third quarter ended October 30, 2021 (13 weeks) increased 6.8% to $289.5 million from $271.0 million in the third quarter ended October 31, 2020 (13 weeks). Compared to the third quarter ended November 2, 2019 (13 weeks), third quarter 2021 net sales increased 9.6%. Net income in the third quarter of fiscal 2021 was $30.7 million, or $1.25 per diluted share, compared to net income of $29.1 million, or $1.16 per diluted share, in the third quarter of the prior fiscal year. Net income for the third quarter of 2019 was $19.2 million, or $0.75 per diluted share.

Total net sales for the nine months (39 weeks) ended October 30, 2021 increased 27.0% to $837.2 million from $659.1 million reported for the nine months (39 weeks) ended October 31, 2020. Compared to the first nine months (39 weeks) ended November 2, 2019, net sales increased 18.7%. Net income for the first nine months of 2021 was $81.1 million, or $3.20 per diluted share, compared to net income for the first nine months of fiscal 2020 of $33.4 million, or $1.32 per diluted share, and compared to net income for the first nine months of fiscal 2019 of $29.0 million, or $1.14 per diluted share.

At October 30, 2021, the Company had cash and current marketable securities of $338.1 million compared to cash and current marketable securities of $316.2 million at October 31, 2020. The increase in cash and current marketable securities was driven by cash generated through operations partially offset by share repurchases and capital expenditures. The Company repurchased 2.2 million shares during the quarter at an average cost of $41.00 per share and a total cost of $91.6 million.

Rick Brooks, Chief Executive Officer of Zumiez Inc., stated, “Our business continues to perform extremely well. With a strong back to school season driving record third quarter results, we generated more income in the first nine months of 2021 than in any full year period in the Company’s history and we still have the important holiday season ahead of us. Our operating model has again proven to be highly adaptable as we’ve recently navigated multiple external headwinds starting with the pandemic in early 2020 and now global supply chain disruptions to capitalize on strong consumer demand and expand our market share. The fourth quarter has started well and we are confident that our investments in people, sourcing and fulfillment will allow us to serve our consumers this holiday season with the distinct merchandise, great service and seamless shopping experiences that are the pillars of Zumiez’s long-term success.”

Fourth Quarter To-Date
Total fourth quarter-to-date total sales for the 31 days ending November 30, 2021 increased 11.5%, compared with the same 31-day time period in the prior year ended December 1, 2020. Compared to the 31-day period ended December 3, 2019, total net sales increased 8.6%. Total comparable sales for the 31-day period ending November 30, 2021 were up 8.4% from the comparable period in the prior year, and increased 6.5% from the comparable period in 2019. During the 31 days ending November 30, 2021 we have again experienced closures in Europe as a result of the pandemic. We continue to monitor this situation closely as sustained closures may have an impact on our forth quarter results. Fourth quarter-to-date as of November 30, 2021, the Company has repurchased an additional 0.4 million shares of stock at an average price of $47.91 and a total cost of $17.5 million. This brings 2021 fiscal year-to-date share repurchases to 2.8 million shares at an average cost of $42.16 per share for a total cost of $120.0 million.

Outlook
Due to the continued fast-moving nature of this situation and the uncertainty of impacts on revenue and costs, the Company is not providing an outlook at this time for the fourth quarter or the year.

Conference call Information
A conference call will be held today to discuss third quarter fiscal 2021 results and will be webcast at 5:00 p.m. ET on http://ir.zumiez.com. Participants may also dial (844) 309-0606 (domestic) or (574) 990-9934 (international) followed by the conference identification code of 2639078.

About Zumiez Inc.

Zumiez is a leading specialty retailer of apparel, footwear, accessories and hardgoods for young men and women who want to express their individuality through the fashion, music, art and culture of action sports, streetwear, and other unique lifestyles. As of November 27, 2021, we operated 739 stores, including 607 in the United States, 52 in Canada, 63 in Europe and 17 in Australia. We operate under the names Zumiez, Blue Tomato and Fast Times. Additionally, we operate ecommerce web sites at zumiez.com, zumiez.ca, blue-tomato.com and fasttimes.com.au.

Safe Harbor Statement

Certain statements in this press release and oral statements relating thereto made from time to time by representatives of the Company may constitute forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. These statements include, without limitation, predictions and guidance relating to the Company's future financial performance, brand and product category diversity, ability to adjust product mix, integration of acquired businesses, growing customer demand for our products and new store openings. In some cases, you can identify forward-looking statements by terminology such as, "may," "should," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "potential," "continue," or the negative of these terms or other comparable terminology. These forward-looking statements are based on management's current expectations but they involve a number of risks and uncertainties. Actual results and the timing of events could differ materially from those anticipated in the forward-looking statements as a result of risks and uncertainties, which include, without limitation, those described in the Company’s annual report on Form 10-K for the fiscal year ended January 30, 2021 as filed with the Securities and Exchange Commission and available at www.sec.gov. You are urged to consider these factors carefully in evaluating the forward-looking statements herein and are cautioned not to place undue reliance on such forward-looking statements, which are qualified in their entirety by this cautionary statement. The forward-looking statements speak only as of the date on which they are made and the Company undertakes no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances.


ZUMIEZ INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)

Three Months Ended

October 30, 2021

% of Sales

October 31, 2020

% of Sales

Net sales

$

289,455

100.0

%

$

270,952

100.0

%

Cost of goods sold

174,791

60.4

%

165,146

61.0

%

Gross profit

114,664

39.6

%

105,806

39.0

%

Selling, general and administrative expenses

74,822

25.8

%

67,941

25.0

%

Operating profit

39,842

13.8

%

37,865

14.0

%

Interest income, net

893

0.3

%

769

0.3

%

Other income, net

468

0.1

%

86

0.0

%

Earnings before income taxes

41,203

14.2

%

38,720

14.3

%

Provision for income taxes

10,501

3.6

%

9,581

3.5

%

Net income

$

30,702

10.6

%

$

29,139

10.8

%

Basic earnings per share

$

1.26

$

1.17

Diluted earnings per share

$

1.25

$

1.16

Weighted average shares used in computation of earnings per share:

Basic

24,284

24,864

Diluted

24,629

25,219

Nine Months Ended

October 30, 2021

% of Sales

October 31, 2020

% of Sales

Net sales

$

837,190

100.0

%

659,116

100.0

%

Cost of goods sold

514,393

61.4

%

438,724

66.6

%

Gross profit

322,797

38.6

%

220,392

33.4

%

Selling, general and administrative expenses

216,722

25.9

%

177,263

26.9

%

Operating profit

106,075

12.7

%

43,129

6.5

%

Interest income, net

2,833

0.3

%

2,637

0.4

%

Other income, net

571

0.1

%

584

0.1

%

Earnings before income taxes

109,479

13.1

%

46,350

7.0

%

Provision for income taxes

28,394

3.4

%

12,920

1.9

%

Net income

$

81,085

9.7

%

33,430

5.1

%

Basic earnings per share

$

3.26

1.34

Diluted earnings per share

$

3.20

1.32

Weighted average shares used in computation of earnings per share:

Basic

24,905

24,913

Diluted

25,325

25,271


ZUMIEZ INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)

October 30, 2021

January 30, 2021

October 31, 2020

(Unaudited)

(Unaudited)

Assets

Current assets

Cash and cash equivalents

$

75,545

$

73,622

$

84,939

Marketable securities

262,541

301,920

231,234

Receivables

22,107

16,558

19,301

Inventories

175,108

134,354

160,961

Prepaid expenses and other current assets

11,633

8,823

9,240

Total current assets

546,934

535,277

505,675

Fixed assets, net

91,956

98,352

101,820

Operating lease right-of-use assets

244,777

267,152

273,796

Goodwill

59,525

61,470

59,540

Intangible assets, net

15,409

16,029

15,329

Deferred tax assets, net

7,784

9,927

8,192

Other long-term assets

11,804

10,157

9,802

Total long-term assets

431,255

463,087

468,479

Total assets

$

978,189

$

998,364

$

974,154

Liabilities and Shareholders’ Equity

Current liabilities

Trade accounts payable

$

84,609

$

69,751

$

84,069

Accrued payroll and payroll taxes

27,436

27,911

25,603

Income taxes payable

11,095

6,317

8,402

Operating lease liabilities

64,389

66,993

72,526

Other liabilities

30,112

24,480

25,327

Total current liabilities

217,641

195,452

215,927

Long-term operating lease liabilities

220,524

246,123

255,160

Other long-term liabilities

8,282

4,193

3,881

Total long-term liabilities

228,806

250,316

259,041

Total liabilities

446,447

445,768

474,968

Shareholders’ equity

Preferred stock, no par value, 20,000 shares authorized; none issued and outstanding

Common stock, no par value, 50,000 shares authorized; 23,319 shares issued and outstanding at October 30, 2021, 25,599 shares issued and outstanding at January 30, 2021, and 25,472 shares issued and outstanding at October 31, 2020

179,049

171,628

167,119

Accumulated other comprehensive (loss) income

(5,867

)

939

(5,165

)

Retained earnings

358,560

380,029

337,232

Total shareholders’ equity

531,742

552,596

499,186

Total liabilities and shareholders’ equity

$

978,189

$

998,364

$

974,154


ZUMIEZ INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)

Nine Months Ended

October 30, 2021

October 31, 2020

Cash flows from operating activities:

Net income

$

81,085

$

33,430

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation, amortization and accretion

17,318

17,909

Noncash lease expense

48,131

45,797

Deferred taxes

2,772

(2,155

)

Stock-based compensation expense

5,118

4,795

Impairment of long-lived assets

2,079

4,443

Other

1,204

(430

)

Changes in operating assets and liabilities:

Receivables

(3,681

)

(1,030

)

Inventories

(41,702

)

(24,856

)

Prepaid expenses and other assets

(4,275

)

532

Trade accounts payable

14,276

36,196

Accrued payroll and payroll taxes

(351

)

1,711

Income taxes payable

4,253

2,629

Operating lease liabilities

(59,099

)

(40,945

)

Other liabilities

4,808

3,728

Net cash provided by operating activities

71,936

81,754

Cash flows from investing activities:

Additions to fixed assets

(8,808

)

(7,488

)

Purchases of marketable securities and other investments

(151,089

)

(135,515

)

Sales and maturities of marketable securities and other investments

186,116

104,742

Net cash provided by (used in) investing activities

26,219

(38,261

)

Cash flows from financing activities:

Proceeds from issuance and exercise of stock-based awards

2,863

959

Payments for tax withholdings on equity awards

(560

)

(93

)

Common stock repurchased

(98,520

)

(13,417

)

Net cash used in financing activities

(96,217

)

(12,551

)

Effect of exchange rate changes on cash, cash equivalents, and restricted cash

(66

)

1,899

Net increase in cash, cash equivalents, and restricted cash

1,872

32,841

Cash, cash equivalents, and restricted cash, beginning of period

80,690

58,991

Cash, cash equivalents, and restricted cash, end of period

$

82,562

$

91,832

Supplemental disclosure on cash flow information:

Cash paid during the period for income taxes

$

20,507

$

11,933

Accrual for purchases of fixed assets

1,851

346

Accrual for repurchase of common stock

4,034

Company Contact:
Darin White
Director of Finance &
Investor Relations
Zumiez Inc.
(425) 551-1500, ext. 1337

Investor Contact:
ICR
Brendon Frey
(203) 682-8200







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