Editor’s note: Net income declines 19.2% to $2.1 million due to acquisition, relocation costs
Press Release:
LYNNWOOD, WA–(Marketwire -08/30/12)- Zumiez Inc. (ZUMZ) a leading specialty retailer of action sports related apparel, footwear, equipment and accessories, today reported results for the second quarter ended July 28, 2012.
Total net sales for the second quarter ended July 28, 2012 (13 weeks) increased 20.4% to $135.1 million from $112.2 million in the quarter ended July 30, 2011 (13 weeks). The second quarter results include our acquisition of Blue Tomato which closed on July 4, 2012.
Comparable store sales for the second quarter of fiscal 2012 increased 9.5% on top of a comparable store sales increase of 7.5% in the second quarter of fiscal 2011.
Net income in the second quarter of fiscal 2012 was $2.1 million, or $0.07 per diluted share, compared to net income of $2.6 million, or $0.08 per diluted share, in the second quarter of the prior fiscal year. The results for fiscal 2012 include approximately $2.5 million, or $0.07 per diluted share, of Blue Tomato acquisition related costs and operations, and approximately $1.3 million, or $0.03 per diluted share, of costs associated with the relocation the Company’s ecommerce fulfillment center to Edwardsville, Kansas and its corporate offices to Lynnwood, Washington from Everett, Washington.
Total net sales for the six months (26 weeks) ended July 28, 2012 increased 21.5% to $265.0 million from $218.1 million reported for the six months (26 weeks) ended July 30, 2011.
Comparable store sales increased 11.1% in the first six months of fiscal 2012 on top of 9.9% for the first six months of 2011.
The Company reported net income of $6.6 million or $0.21 per diluted share in the first six months of fiscal 2012 compared to net income for the first six months of the prior fiscal year of $4.5 million or $0.14 per diluted share. Results for the first six months of fiscal 2012 include approximately $2.8 million, or $0.08 per diluted share, of Blue Tomato acquisition related costs and operations, approximately $1.6 million, or $0.03 per diluted share, of costs associated with the relocation the Company’s ecommerce fulfillment center to Edwardsville, Kansas and corporate offices to Lynnwood, Washington from Everett, Washington.
At July 28, 2012, the Company had cash and current marketable securities of $96.8 million, compared to cash and current marketable securities of $131.9 million at July 30, 2011. The decrease in cash and current marketable securities is a result of the acquisition of Blue Tomato and was funded by the Company’s cash balance, offset by cash generated through operations.
Rick Brooks, Chief Executive Officer of Zumiez Inc., stated, “The second quarter was a productive and transformational period for our Company. We continued to expand our North American footprint while at the same time driving a high single digit comparable sales gain. Our teams continue to execute at a very high level to ensure that our merchandise assortments are relevant and that the shopping experience is unique and differentiated regardless of what channel consumers chose to engage with us. We also took a significant step in our long-term plan to create a global action sports business with the acquisition of Blue Tomato. With established leadership in North America and Europe, we are focused on leveraging our combined expertise to take full advantage of the many expansion opportunities that exist in each of our markets.”
August 2012 Sales
Total net sales for the four-week period ended August 25, 2012 increased 14.1% to $75.2 million, compared to $65.9 million for the four-week period ended August 27, 2011. The Company’s comparable store sales increased 3.7% for the four-week period on top of a comparable store sales increase of 4.3% in the year ago period.
Fiscal 2012 Third Quarter Outlook
The Company is introducing guidance for the three months ending October 27, 2012. Net sales are projected to be in the range of $181 to $185 million resulting in net income per diluted share of approximately $0.42 to $0.45. This guidance is based on an anticipated comparable store sales increase in the 3% to 5% range for the third quarter of fiscal 2012 and reflects a full quarter of operations for Blue Tomato, including approximately $2.5 million, or $0.06 per diluted share, in estimated future incentive payments and the amortization of intangible assets, as well as costs of approximately $1.4 million, or $0.03 per diluted share, associated with the step-up in inventory to estimated fair value in conjunction with our acquisition of Blue Tomato. The Company currently intends to open approximately 50 new stores in fiscal 2012, including up to 10 stores in Canada, with an opening cadence similar to fiscal 2011. The Company does not anticipate opening a material number of stores in Europe in the current fiscal year.
About Zumiez Inc.
Zumiez is a leading multi-channel specialty retailer of action sports related apparel, footwear, equipment and accessories, focusing on skateboarding, snowboarding, surfing, motocross and BMX for young men and women. As of August 25, 2012 we operated 486 stores, 463 in the United States, 18 in Canada, and 5 in Europe. In the United States and Canada we operate under the name Zumiez and in Europe we operate under the name Blue Tomato. Additionally, we operate ecommerce web sites under www.zumiez.com and www.blue-tomato.com.
