GlobeNewswire Inc | Sep 9, 2021 04:05PM EDT

September 09, 2021

Net Sales Increased 7.3% to $268.7 MillionDiluted Earnings Per Share of $0.94

LYNNWOOD, Wash., Sept. 09, 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 second quarter ended July 31, 2021.

Net sales for the second quarter ended July 31, 2021 (13 weeks) increased 7.3% to $268.7 million from $250.4 million in the second quarter ended August 1, 2020 (13 weeks). Compared to the second quarter ended August 3, 2019 (13 weeks), second quarter 2021 net sales increased 17.6%. Net income in the second quarter of fiscal 2021 was $24.0 million, or $0.94 per diluted share, compared to net income of $25.4 million, or $1.01 per diluted share, in the second quarter of the prior fiscal year. Net income for the second quarter of 2019 was $9.0 million, or $0.36 per diluted share. Our second quarter 2021 net income was negatively impacted by $2.8 million, or approximately $0.08 per diluted share related to the conditional settlement of a California class action lawsuit.

Total net sales for the six months (26 weeks) ended July 31, 2021 increased 41.1% to $547.7 million from $388.2 million reported for the six months (26 weeks) ended August 1, 2020. Compared to the first six months (26 weeks) ended August 3, 2019, net sales increased 24.1%. Net income for the first six months of 2021 was $50.4 million, or $1.96 per diluted share, compared to net income for the first six months of fiscal 2020 of $4.3 million, or $0.17 per diluted share, and compared to net income for the first six months of fiscal 2019 of $9.8 million, or $0.39 per diluted share.

At July 31, 2021, the Company had cash and current marketable securities of $412.0 million compared to cash and current marketable securities of $299.1 million at August 1, 2020. The increase in cash and current marketable securities was driven by cash generated through operations partially offset by capital expenditures. The Company repurchased 0.2 million shares during the quarter at an average cost of $44.21 per share and a total cost of $10.9 million.

Rick Brooks, Chief Executive Officer of Zumiez Inc., stated, Our second quarter performance reflects the sustained success our business has experienced over the past several years. After driving solid growth as we reopened our stores in the second quarter of last year, our teams once again did a terrific job adapting to the current environment to fulfill robust demand for our distinct merchandise offering. Stronger than expected full priced selling helped offset a portion of expenses that were reintroduced following temporary cost savings last year during the height of the pandemic, resulting in second quarter profitability that meaningfully exceeded our projections. The third quarter has started off well driven by a more normalized back to school shopping season, and while operating conditions remain volatile, we believe the flexibility of our business model provides us with key competitive advantages that we can leverage to maintain our positive momentum heading into the holidays. With our strong balance sheet and differentiated strategies, we are well positioned to add to our global market share and return increased value to our shareholders over the long-term.

Third Quarter To-DateTotal third quarter-to-date total sales for the 37 days ending September 6, 2021 increased 23.2%, compared with the same 37-day time period in the prior year ended September 7, 2020. Compared to the 37-day period ended September 9, 2019, total net sales increased 6.7%. Total comparable sales for the 37-day period ending September 6, 2021 were up 10.5% from the comparable period in the prior year, and increased 5.4% from the comparable period in 2019. Third quarter to date as of September 7, 2021, the Company has repurchased an additional 0.5 million shares of stock at an average price of $41.62 and a total cost of $20.5 million. This brings 2021 fiscal year-to-date share repurchases to 0.7 million shares at an average cost of $42.49 per share for a total cost of $31.4 million.

OutlookDue 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 third quarter or the year.

Conference call Information A conference call will be held today to discuss second 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 8085802.

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 August 28, 2021, we operated 727 stores, including 603 in the United States, 52 in Canada, 55 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 Companys 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.

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

Three MonthsEnded July 31, 2021 % of August % of Sales 1, 2020 SalesNet sales $ 268,666 100.0 % $ 250,392 100.0 % Cost of goods sold 163,701 60.9 % 159,542 63.7 % Gross profit 104,965 39.1 % 90,850 36.3 % Selling, general andadministrative 73,011 27.2 % 57,738 23.1 % expensesOperating profit 31,954 11.9 % 33,112 13.2 % Interest income, net 965 0.4 % 794 0.3 % Other (expense) (151 ) (0.1 %) 392 0.2 % income, netEarnings before income 32,768 12.2 % 34,298 13.7 % taxesProvision for income 8,770 3.3 % 8,906 3.6 % taxesNet income $ 23,998 8.9 % $ 25,392 10.1 % Basic earnings per $ 0.95 $ 1.02 shareDiluted earnings per $ 0.94 $ 1.01 shareWeighted averageshares used in computation ofearnings per share:Basic 25,274 24,837 Diluted 25,651 25,128 Six Months Ended July 31, 2021 % of August % of Sales 1, 2020 SalesNet sales $ 547,735 100.0 % 388,164 100.0 % Cost of goods sold 339,602 62.0 % 273,578 70.5 % Gross profit 208,133 38.0 % 114,586 29.5 % Selling, general andadministrative 141,900 25.9 % 109,322 28.1 % expensesOperating profit 66,233 12.1 % 5,264 1.4 % Interest income, net 1,940 0.4 % 1,868 0.5 % Other income, net 103 0.0 % 498 0.1 % Earnings before income 68,276 12.5 % 7,630 2.0 % taxesProvision for income 17,893 3.3 % 3,339 0.9 % taxesNet income $ 50,383 9.20 % 4,291 1.1 % Basic earnings per $ 2.00 0.17 shareDiluted earnings per $ 1.96 0.17 shareWeighted averageshares used in computation ofearnings per share:Basic 25,221 24,938 Diluted 25,675 25,277

ZUMIEZ INC. CONDENSED CONSOLIDATED BALANCE SHEETS(In thousands)

July 31, 2021 January August 1, 30, 2021 2020 (Unaudited) (Unaudited) Assets Current assets Cash and cash equivalents $ 74,207 $ 73,622 $ 133,905 Marketable securities 337,772 301,920 165,227 Receivables 24,834 16,558 24,811 Inventories 149,368 134,354 126,701 Prepaid expenses and other current 11,656 8,823 10,560 assetsTotal current assets 597,837 535,277 461,204 Fixed assets, net 92,921 98,352 106,151 Operating lease right-of-use assets 246,592 267,152 277,322 Goodwill 60,440 61,470 60,225 Intangible assets, net 15,629 16,029 15,577 Deferred tax assets, net 5,879 9,927 7,080 Other long-term assets 11,444 10,157 9,337 Total long-term assets 432,905 463,087 475,692 Total assets $ 1,030,742 $ 998,364 $ 936,896 Liabilities and Shareholders? EquityCurrent liabilities Trade accounts payable $ 80,174 $ 69,751 $ 75,318 Accrued payroll and payroll taxes 23,371 27,911 17,816 Income taxes payable 7,494 6,317 5,534 Operating lease liabilities 65,844 66,993 74,558 Other liabilities 28,270 24,480 30,374 Total current liabilities 205,153 195,452 203,600 Long-term operating lease 223,043 246,123 259,412 liabilitiesOther long-term liabilities 8,250 4,193 3,858 Total long-term liabilities 231,293 250,316 263,270 Total liabilities 436,446 445,768 466,870 Shareholders? equity Preferred stock, no par value,20,000 shares authorized; none ? ? ? issued and outstandingCommon stock, no par value,50,000shares authorized; 25,559shares issued and outstanding atJuly 31, 2021, 25,599 shares issued 176,951 171,628 165,056 and outstanding at January 30,2021, and and 25,450 shares issuedand outstanding at August 1, 2020Accumulated other comprehensive (2,144 ) 939 (3,123 ) (loss) incomeRetained earnings 419,489 380,029 308,093 Total shareholders? equity 594,296 552,596 470,026 Total liabilities and shareholders? $ 1,030,742 $ 998,364 $ 936,896 equity

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

Six Months Ended July 31, August 1, 2021 2020Cash flows from operating activities: Net income $ 50,383 $ 4,291 Adjustments to reconcile net income to net cash provided by operating activities:Depreciation, amortization and accretion 11,639 12,005 Noncash lease expense 32,044 30,167 Deferred taxes 4,260 (1,144 ) Stock-based compensation expense 3,431 3,146 Impairment of long-lived assets 2,079 2,128 Other 1,064 (428 ) Changes in operating assets and liabilities: Receivables (5,353 ) (5,871 ) Inventories (15,408 ) 9,926 Prepaid expenses and other assets (4,173 ) (937 ) Trade accounts payable 10,178 27,323 Accrued payroll and payroll taxes (4,462 ) (6,134 ) Income taxes payable (304 ) (317 ) Operating lease liabilities (40,413 ) (20,868 ) Other liabilities 7,165 8,718 Net cash provided by operating activities 52,130 62,005 Cash flows from investing activities: Additions to fixed assets (5,418 ) (5,024 ) Purchases of marketable securities and other (112,888 ) (35,720 ) investmentsSales and maturities of marketable securities 75,234 71,387 and other investmentsNet cash (used in) provided by investing (43,072 ) 30,643 activitiesCash flows from financing activities: Proceeds from issuance and exercise of 2,452 545 stock-based awardsPayments for tax withholdings on equity awards (560 ) (93 ) Common stock repurchased (10,481 ) (13,417 ) Net cash used in financing activities (8,589 ) (12,965 ) Effect of exchange rate changes on cash, cash 139 2,146 equivalents, and restricted cashNet increase in cash, cash equivalents, and 608 81,829 restricted cashCash, cash equivalents, and restricted cash, 80,690 58,991 beginning of periodCash, cash equivalents, and restricted cash, $ 81,298 $ 140,820 end of periodSupplemental disclosure on cash flow information:Cash paid during the period for income taxes $ 13,542 $ 4,630 Accrual for purchases of fixed assets 686 381 Accrual for repurchase of common stock 442 ?

Company Contact:Darin WhiteDirector of Finance & Investor RelationsZumiez Inc.(425) 551-1500, ext. 1337

Investor Contact:ICRBrendon Frey (203) 682-8200