Key Takeaways:
- Zumiez’s second quarter sales slipped as footwear weakness and lower U.S. store traffic outweighed growth in its international markets.
- Back-to-school trends into the third quarter have softened against difficult prior-year comparisons, prompting a more cautious outlook.
- The company’s full-year outlook has swung from expected growth to an expected decline over the course of fiscal 2026.
We are catching up on the news from last week about Zumiez’s challenging Q2 2026 results.
The industry customer reported a decline in second quarter sales, with executives pointing to continued footwear weakness and lower store traffic in the U.S. as the primary drags on the business.
Trends into the back-to-school season have also softened further, the company said, against strong comparisons from the prior two years.
Zumiez Q2 Results
Net sales for the 13 weeks ended Aug. 1 fell 2.5% to $209 million, from $214.3 million a year earlier. Comparable sales were down 2.1% for the quarter. Net sales came in below the $210 million to $215 million range Zumiez had forecast for the quarter.
North America net sales totaled $174 million, down 3.4% from the prior year, or 3.3% in constant currency. Comparable sales in the region fell 2.9%.
Other international net sales, which include Europe and Australia, rose 2.5% to $35.1 million, or 0.8% in constant currency. Comparable sales in that segment increased 2.1%.
Companywide, accessories and men’s were the only categories to post positive comparable sales during the quarter. Footwear, hardgoods and women’s all declined.
Gross profit fell to $73.9 million from $76.0 million a year ago. Gross margin came in at 35.3% of sales, down 20 basis points, driven by 60 basis points of deleverage in store occupancy costs that was partially offset by a 50-basis-point benefit from tariff refunds.
Selling, general and administrative expenses were $75.2 million, or 35.9% of net sales, compared with $75.9 million, or 35.4% of net sales, a year earlier.
Net loss for the quarter was $2.7 million, or $0.17 per share, compared with a net loss of $1 million, or $0.06 per share, in the same period last year. The per-share loss landed within the company’s previously forecast range of a loss of $0.23 to a loss of $0.08.
Zumiez CEO Rick Brooks said the company is focused on turning results around.
“Let me be clear, I am disappointed with our current results, and our people are working hard to improve the business,” Brooks said on the company’s earnings call Thursday.
Footwear Weighs on U.S. Business
Brooks discussed the footwear softness on the call.
“The footwear category has been the most significant headwind accounting for 70% of the total U.S. sales decline from the prior year through that time frame,” Brooks said.
Brooks said the category has been under pressure since the second quarter of fiscal 2025, but that comparisons ease as the company moves into the fourth quarter.
Responding to an analyst question, Brooks said the company is trying multiple approaches to offset the decline of big footwear brands that are trending down, adding that some products are performing well but not at a level that can offset that trend. He said Zumiez continues to work with brand partners to bring more distinctive footwear into its assortment.
Third Quarter Outlook Turns CautiousÂ
Third quarter-to-date net sales for the 37 days ended Sept. 7 decreased 4.3% compared with the same period a year earlier, with comparable sales down 3.5%.
Brooks said U.S. trends are running down against very strong back-to-school performance over the same period in the two prior years, when comparable sales grew 14.1% in 2024 and 13.2% in 2025, while international markets have posted low single digit positive comparable sales over the same recent stretch.
For the third quarter, Zumiez forecast net sales between $222 million and $226 million, a decline of 5.5% to 7% from a year ago. Comparable sales are expected to be down between 5% and 6.5%, a steeper decline than the 3.5% drop the company has seen quarter-to-date.
Product margin is forecast to decline 20 to 40 basis points because of the U.S. slowdown and a growing share of international sales, which carry a lower margin. Earnings per share are expected to be between breakeven and $0.10, compared with $0.55 a year earlier.
CFO Chris Work said the company built caution into that outlook.
“Given the softness in back-to-school results, we believe it is prudent to look forward with an appropriate level of conservatism,” Work said.
Work said the company expects the back half of the third quarter to perform worse than the back-to-school period, consistent with a pattern it has seen in past years once there is less occasion for customers to shop.
Full-Year Outlook Lowered
Zumiez’s full-year outlook has shifted over the course of fiscal 2026.
On the company’s first-quarter call in June, Work said Zumiez still expected to grow full-year sales, inclusive of the roughly $12 million negative impact from store closures, though softer than the low single-digit growth framing it had given in March. He also reiterated the company’s target of 50 to 100 basis points of operating margin growth for the year.
On the second-quarter call, that outlook reversed. Zumiez now expects full-year sales to be down low single digits, still inclusive of the $12 million store-closure impact, and expects operating margin to be down slightly rather than grow. Gross margin is expected to be roughly flat for the year.
Balance Sheet and Store Plans
Zumiez ended the quarter with $97.3 million in cash and current marketable securities, compared with $106.7 million a year earlier, driven largely by share repurchases and capital spending. The company repurchased 1.2 million shares during the quarter for $23.2 million, completing, in early September, its $40 million buyback program that the board authorized in March. Zumiez remains debt-free.
Inventory stood at $157.3 million, flat with the prior year on a constant currency basis.
As of Aug. 29, Zumiez operated 714 stores under the Zumiez, Blue Tomato and Fast Times banners, including 561 in the United States, 45 in Canada, 81 in Europe and 27 in Australia.
The company plans to open five new stores in the U.S. during fiscal 2026 while closing roughly 16 stores, including 10 in North America and six internationally, a smaller round of closures than the approximately 26 stores, including 20 in North America and six internationally, it had previously planned to close.
Excerpt:Â Zumiez’s full-year outlook has shifted since June, as footwear weakness and a softer back-to-school season pushed the company from expecting sales growth to forecasting a low single digit decline.
Meta Description:Â Zumiez’s full-year outlook reversed from growth to a low single digit decline as footwear weakness and a soft back-to-school season took hold.
