Zumiez Inc. Announces Fiscal 2021 Fourth Quarter Results

LYNNWOOD, Wash., March 10, 2022 (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 fourth quarter and year ended January 29, 2022.

Net sales for the fourth quarter ended January 29, 2022 (13 weeks) increased 4.6% to $346.7 million from $331.5 million in the fourth quarter ended January 30, 2021 (13 weeks). Compared to the fourth quarter ended February 1, 2020 (13 weeks), fourth quarter 2021 net sales increased 5.5%. Net income in the fourth quarter of fiscal 2021 was $38.2 million, or $1.70 per diluted share, compared to net income of $42.8 million, or $1.68 per diluted share, in the fourth quarter of the prior fiscal year. Net income for the fourth quarter of 2019 was $37.9 million, or $1.48 per diluted share.

Total net sales for fiscal 2021 (52 weeks) ended January 29, 2022 increased 19.5% to $1,183.9 million from $990.7 million reported for fiscal 2020 (52 weeks) ended January 30, 2021. Compared to the fiscal 2019 (52 weeks) ended February 1, 2020, net sales increased 14.5%. Net income for fiscal 2021 was $119.3 million, or $4.85 per diluted share, compared to net income for fiscal 2020 of $76.2 million, or $3.00 per diluted share, and compared to net income for fiscal 2019 of $66.9 million, or $2.62 per diluted share.

At January 29, 2022, the Company had cash and current marketable securities of $294.5 million compared to cash and current marketable securities of $375.5 million at January 30, 2021. The decrease in cash and current marketable securities was driven by share repurchases and capital expenditures partially offset by cash generated through operations. The Company repurchased 4.6 million shares during fiscal 2021 an average cost of $43.30 per share and a total cost of $198.4 million.

Rick Brooks, Chief Executive Officer of Zumiez Inc., stated, “Fiscal 2021 was a year of tremendous growth and record profitability for Zumiez. Our multi-year success is directly attributable to the execution of the long-term consumer centric growth strategy the Company has been building and evolving since its inception. This strategy, which requires significant agility in navigating the trend cycles and speed desired by our customer, has produced a 36.1% five-year compound annual growth rate in diluted earnings per share and generated $422 million in free cash flow over the same period. And in 2021, we further enhanced our shareholder value creation through the repurchase of 4.6 million shares or 18% of our common stock. We are pleased with our many recent accomplishments and we are excited about the opportunities to profitably expand our global reach in the years to come.”

Fiscal First Quarter-to-Date Sales

Total first quarter-to-date sales for the 35 days ended March 5, 2022 decreased 1.9%, compared with the same 35 day time period in the prior year ended March 6, 2021. First quarter-to-date as of March 5, 2022, the Company has repurchased an additional 1.2 million shares of stock at an average price of $44.47 and a total cost of $54.3 million.

Outlook

Given the positive impact of stimulus on net sales in the first quarter of fiscal 2021 and the current economic uncertainty, the Company anticipates that net sales for the first quarter of fiscal 2022 will be between $215 million and $221 million, down meaningfully to the prior year. With this reduction in sales the Company expects deleverage in the income statement related to both fixed costs as well as the re-introduction of expenses forgone in 2021 as a result of the COVID-19 pandemic such as store wages, training and travel. Earnings per diluted share for the quarter are expected to be break-even to positive $0.10 per diluted share.

The Company currently intends 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.

Conference call Information

A conference call will be held today to discuss fourth quarter and 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 4186044.

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 February 26, 2022, we operated 738 stores, including 602 in the United States, 52 in Canada, 67 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
			January 29,			% of			January 30,			% of
			2022			Sales			2021			Sales
			(Unaudited)						(Unaudited)
Net sales		$	346,677			100.0	%			331,536		100.0	%
Cost of goods sold			212,744			61.4	%			201,913		60.9	%
Gross profit			133,933			38.6	%			129,623		39.1	%
Selling, general and administrative expenses			82,198			23.7	%			75,814		22.9	%
Operating profit			51,735			14.9	%			53,809		16.2	%
Interest income, net			759			0.2	%			881		0.3	%
Other (expense) income, net			(1,462	)		-0.4	%			1,417		0.4	%
Earnings before income taxes			51,032			14.7	%			56,107		16.9	%
Provision for income taxes			12,828			3.7	%			13,310		4.0	%
Net income		$	38,204			11.0	%		$	42,797		12.9	%
Basic earnings per share		$	1.73						$	1.71
Diluted earnings per share		$	1.70						$	1.68
Weighted average shares used in computation of earnings per share:
Basic			22,056							25,024
Diluted			22,451							25,462
			Fiscal Year Ended
			January 29,			% of			January 30,			% of
			2022			Sales			2021			Sales
			(Unaudited)
Net sales		$	1,183,867			100.0	%		$	990,652		100.0	%
Cost of goods sold			727,137			61.4	%			640,637		64.7	%
Gross profit			456,730			38.6	%			350,015		35.3	%
Selling, general and administrative expenses			298,920			25.3	%			253,077		25.5	%
Operating profit			157,810			13.3	%			96,938		9.8	%
Interest income, net			3,592			0.4	%			3,518		0.3	%
Other (expense) income, net			(891	)		-0.1	%			2,001		0.2	%
Earnings before income taxes			160,511			13.6	%			102,457		10.3	%
Provision for income taxes			41,222			3.5	%			26,230		2.6	%
Net income		$	119,289			10.1	%		$	76,227		7.7	%
Basic earnings per share		$	4.93						$	3.06
Diluted earnings per share		$	4.85						$	3.00
Weighted average shares used in computation of earnings per share:
Basic			24,187							24,942
Diluted			24,593							25,398

ZUMIEZ INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)

		January 29, 2022				January 30, 2021
		(Unaudited)
Assets
Current assets
Cash and cash equivalents		$	117,223			$	73,622
Marketable securities			177,260				301,920
Receivables			14,427				16,558
Inventories			128,728				134,354
Prepaid expenses and other current assets			10,011				8,823
Total current assets			447,649				535,277
Fixed assets, net			91,451				98,352
Operating lease right-of-use assets			230,187				267,152
Goodwill			57,560				61,470
Intangible assets, net			14,698				16,029
Deferred tax assets, net			8,659				9,927
Other long-term assets			11,808				10,157
Total long-term assets			414,363				463,087
Total assets		$	862,012			$	998,364
Liabilities and Shareholders’ Equity
Current liabilities
Trade accounts payable		$	55,638			$	69,751
Accrued payroll and payroll taxes			31,209				27,911
Income taxes payable			1,137				6,317
Operating lease liabilities			63,577				66,993
Other liabilities			32,878				24,480
Total current liabilities			184,439				195,452
Long-term operating lease liabilities			204,309				246,123
Other long-term liabilities			4,946				4,193
Total long-term liabilities			209,255				250,316
Total liabilities			393,694				445,768
Shareholders’ equity
Preferred stock, no par value, 20,000 shares authorized; none issued and outstanding			—				—
Common stock, no par value, 50,000 shares authorized; 21,215 shares issued and outstanding at January 29, 2022 and 25,599 shares issued and outstanding at January 30, 2021			180,824				171,628
Accumulated other comprehensive (loss) income			(13,463	)			939
Retained earnings			300,957				380,029
Total shareholders’ equity			468,318				552,596
Total liabilities and shareholders’ equity		$	862,012			$	998,364

 

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

		Fiscal Year Ended
		January 29, 2022				January 30, 2021
		(Unaudited)
Cash flows from operating activities:
Net income		$	119,289			$	76,227
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and accretion			22,930				24,059
Noncash lease expense			64,466				61,694
Deferred taxes			2,374				(3,890	)
Stock-based compensation expense			6,816				6,448
Impairment of long-lived assets			2,229				4,803
Other			2,728				(570	)
Changes in operating assets and liabilities:
Receivables			2,884				928
Inventories			2,587				3,946
Prepaid expenses and other assets			(2,824	)			1,010
Trade accounts payable			(14,060	)			20,797
Accrued payroll and payroll taxes			3,649				3,841
Income taxes payable			(5,101	)			1,602
Operating lease liabilities			(77,657	)			(65,479	)
Other liabilities			4,640				2,996
Net cash provided by operating activities			134,950				138,412
Cash flows from investing activities:
Additions to fixed assets			(15,749	)			(9,057	)
Purchases of marketable securities and other investments			(160,328	)			(222,785	)
Sales and maturities of marketable securities and other investments			277,720				121,301
Net cash provided by (used in) investing activities			101,643				(110,541	)
Cash flows from financing activities:
Proceeds from issuance and exercise of stock-based awards			3,001				3,877
Payments for tax withholdings on equity awards			(621	)			(154	)
Common stock repurchased			(193,789	)			(13,417	)
Net cash (used in) provided by financing activities			(191,409	)			(9,694	)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash			(1,822	)			3,522
Net increase in cash, cash equivalents, and restricted cash			43,362				21,699
Cash, cash equivalents, and restricted cash, beginning of period			80,690				58,991
Cash, cash equivalents, and restricted cash, end of period		$	124,052			$	80,690
Supplemental disclosure on cash flow information:
Cash paid during the period for income taxes		$	42,767			$	27,598
Accrual for repurchase of common stock			4,572				—
Accrual for purchases of fixed assets			984				231

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

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