Second Quarter 2019 Sales Increased 4.3% to $228.4 MillionSecond Quarter 2019 Diluted Earnings Per Share Increased 111.8% to $0.36August 2019 Comparable Sales Increased 7.1%Company Raises Full Year Outlook

LYNNWOOD, Wash., Sept. 05, 2019 (GLOBE NEWSWIRE) -- Zumiez Inc. (NASDAQ: ZUMZ) today reported results for the second quarter ended August 3, 2019. Total net sales for the second quarter ended August 3, 2019 (13 weeks) increased 4.3% to $228.4 million from $219.0 million in the quarter ended August 4, 2018 (13 weeks). Comparable sales for the thirteen weeks ended August 3, 2019 increased 3.6% compared to a comparable sales increase of 6.3% for the thirteen weeks ended August 4, 2018. Net income for the second quarter of fiscal 2019 was $9.0 million, or $0.36 per diluted share, compared to net income of $4.4 million, or $0.17 per diluted share in the second quarter of the prior fiscal year.

Total net sales for the six months (26 weeks) ended August 3, 2019 increased 3.8% to $441.4 million from $425.3 million reported for the six months (26 weeks) ended August 4, 2018. Comparable sales increased 3.5% for the twenty-six weeks ended August 3, 2019 compared to a comparable sales increase of 7.2% for the twenty-six weeks ended August 4, 2018. Net income for the first six months of fiscal 2019 was $9.8 million, or $0.39 per diluted share, compared to net income for the first six months of the prior fiscal year of $1.8 million, or $0.07 per diluted share.

At August 3, 2019, the Company had cash and current marketable securities of $188.6 million compared to cash and current marketable securities of $132.9 million at August 4, 2018. The increase in cash and current marketable securities was driven by cash generated through operations partially offset by capital expenditures. Rick Brooks, Chief Executive Officer of Zumiez Inc., stated, “Our relentless attention to serving our customers combined with the power of our operating model once again fueled solid comparable sales growth and a significant improvement in profitability. Despite tougher two-year stacked comparisons, we continued to experience strong full price selling driven by our differentiated merchandise offering, authentic brand positioning and seamless shopping experience in whatever channel the customer wants to experience us. Additionally, we are starting to witness the benefits of our work aimed at executing our distinct approach to retailing in markets outside of North America. Our better than expected second quarter performance, combined with a good start to the third quarter, provides us with great momentum heading into the back half of the year and puts us into a position to deliver another year of record profitability.”August 2019 SalesThe Company's comparable sales increased 7.1% for the four-week period ended August 31, 2019 compared to a comparable sales increase of 9.5% for the four-week period ended September 1, 2018. Outlook The Company is introducing guidance for the three months ending November 2, 2019. Net sales are projected to be in the range of $258 to $263 million including anticipated comparable sales growth of between 3.0% and 5.0%. Consolidated operating margins are expected to between 7.0% and 7.7% resulting in net income per diluted share of approximately $0.55 to $0.61. Based on better than anticipated trends and performance year-to-date, the Company is raising its annual guidance. Fiscal 2019 comparable sales are now expected to increase between 2.0% and 4.0% compared to prior guidance of low single digits. Diluted earnings per share are now projected to range from $2.10 to $2.20, up from previous guidance of $1.84 to $1.94. The Company currently intends to open approximately 16 new stores in fiscal 2019, including up to 6 stores in North America, 7 stores in Europe and 3 stores in Australia.

Conference call Information A conference call will be held today to discuss second quarter fiscal 2019 results and will be webcast at 5:00 p.m. ET on http://ir.zumiez.com. Participants may also dial (574) 990-9934 followed by the conference identification code of 3882277.

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 31, 2019, we operated 711 stores, including 607 in the United States, 51 in Canada, 43 in Europe and 10 in Australia. We operate under the names Zumiez, Blue Tomato and Fast Times. Additionally, we operate ecommerce web sites at zumiez.com, 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 February 2, 2019 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
		August 3, 2019			% of Sales				August 4, 2018			% of Sales
Net sales		$	228,425		100.0	%		$	218,971			100.0	%
Cost of goods sold			151,229		66.2	%			146,436			66.9	%
Gross profit			77,196		33.8	%			72,535			33.1	%
Selling, general and administrative expenses			65,523		28.7	%			65,837			30.0	%
Operating profit			11,673		5.1	%			6,698			3.1	%
Interest income, net			798		0.3	%			238			0.1	%
Other income, net			559		0.3	%			248			0.1	%
Earnings before income taxes			13,030		5.7	%			7,184			3.3	%
Provision for income taxes			4,005		1.7	%			2,807			1.3	%
Net income		$	9,025		4.0	%		$	4,377			2.0	%
Basic earnings per share		$	0.36					$	0.18
Diluted earnings per share		$	0.36					$	0.17
Weighted average shares used in computation of earnings per share:
Basic			25,199						24,955
Diluted			25,402						25,188
ZUMIEZ INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share amounts)
		Six Months Ended
		August 3, 2019			% of Sales				August 4, 2018			% of Sales
Net sales		$	441,353		100.0	%			425,257			100.0	%
Cost of goods sold			297,693		67.5	%			290,136			68.2	%
Gross profit			143,660		32.5	%			135,121			31.8	%
Selling, general and administrative expenses			131,019		29.6	%			130,133			30.6	%
Operating profit			12,641		2.9	%			4,988			1.2	%
Interest income, net			1,650		0.3	%			521			0.1	%
Other income (expense), net			711		0.2	%			(233	)		(0.1	%)
Earnings before income taxes			15,002		3.4	%			5,276			1.2	%
Provision for income taxes			5,184		1.2	%			3,506			0.8	%
Net income		$	9,818		2.2	%			1,770			0.4	%
Basic earnings per share		$	0.39						0.07
Diluted earnings per share		$	0.39						0.07
Weighted average shares used in computation of earnings per share:
Basic			25,144						24,894
Diluted			25,395						25,211

ZUMIEZ INC. CONDENSED CONSOLIDATED BALANCE SHEETS(In thousands)
		August 3, 2019					February 2, 2019					August 4, 2018
		(Unaudited)										(Unaudited)
Assets
Current assets
Cash and cash equivalents		$	63,846					$	52,422				$	41,409
Marketable securities			124,803				112,912					91,500
Receivables			21,615				17,776					20,554
Inventories			151,079				129,268					149,656
Prepaid expenses and other current assets			11,789				14,797					16,169
Total current assets			373,132				327,175					319,288
Fixed assets, net			116,219				120,503					125,141
Operating lease right-of-use assets			306,056						—					—
Goodwill			57,306				58,813					59,336
Intangible assets, net			14,672				15,260					15,470
Deferred tax assets, net			6,502				5,259					4,417
Other long-term assets			8,374				7,180					6,815
Total long-term assets			509,129				207,015					211,179
Total assets		$	882,261					$	534,190				$	530,467
Liabilities and Shareholders’ Equity
Current liabilities
Trade accounts payable		$	82,859					$	35,293				$	79,370
Accrued payroll and payroll taxes			15,582				21,015					15,640
Income taxes payable			2,895						5,817					2,580
Deferred rent and tenant allowances			—				7,489					7,895
Operating lease liabilities			58,646						—					—
Short term borrowings			—				—					5,623
Other liabilities			21,150				23,494					21,274
Total current liabilities			181,132				93,108					132,382
Long-term deferred rent and tenant allowances			—				37,076					38,265
Long-term operating lease liabilities			293,450						—					—
Other long-term liabilities			3,472				3,550					4,781
Total long-term liabilities			296,922				40,626					43,046
Total liabilities			478,054				133,734					175,428
Shareholders’ equity
Preferred stock, no par value, 20,000 shares authorized; none issued and outstanding			—						—					—
Common stock, no par value, 50,000 shares authorized; 25,770 shares issued and outstanding at August 3, 2019 and 25,521 shares issued and outstanding at February 2, 2019 and 25,520 shares issued and outstanding at August 4, 2018			156,625				153,066					149,961
Accumulated other comprehensive loss			(12,574		)		(9,224			)		(8,101			)
Retained earnings			260,156				256,614					213,179
Total shareholders’ equity			404,207				400,456					355,039
Total liabilities and shareholders’ equity		$	882,261					$	534,190				$	530,467

ZUMIEZ INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(In thousands)
		Six Months Ended
		August 3, 2019				August 4, 2018
Cash flows from operating activities:
Net income		$	9,818			$	1,770
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and accretion			12,514				13,920
Noncash lease expense			28,318				—
Deferred taxes			935				(990	)
Stock-based compensation expense			3,214				3,012
Other			(165	)			310
Changes in operating assets and liabilities:
Receivables			(770	)			(4,099	)
Inventories			(22,727	)			(25,993	)
Prepaid expenses and other assets			(2,115	)			(1,814	)
Trade accounts payable			47,275				40,815
Accrued payroll and payroll taxes			(5,345	)			(4,785	)
Income taxes payable			(3,857	)			(2,973	)
Deferred rent and tenant allowances			—				(872	)
Operating lease liabilities			(29,842	)			—
Other liabilities			(2,090	)			(2,997	)
Net cash provided by operating activities			35,163				15,304
Cash flows from investing activities:
Additions to fixed assets			(8,292	)			(9,061	)
Purchases of marketable securities and other investments			(93,288	)			(35,046	)
Sales and maturities of marketable securities and other investments			82,123				41,200
Net cash used in investing activities			(19,457	)			(2,907	)
Cash flows from financing activities:
Proceeds from revolving credit facilities			—				29,227
Payments on revolving credit facilities			—				(24,233	)
Proceeds from issuance and exercise of stock-based awards			583				621
Payments for tax withholdings on equity awards			(238	)			(195	)
Net cash provided by financing activities			345				5,420
Effect of exchange rate changes on cash, cash equivalents, and restricted cash			(504	)			(693	)
Net increase in cash, cash equivalents, and restricted cash			15,547				17,124
Cash, cash equivalents, and restricted cash, beginning of period			54,271				25,803
Cash, cash equivalents, and restricted cash, end of period		$	69,818			$	42,927
Supplemental disclosure on cash flow information:
Cash paid during the period for income taxes		$	8,056			$	7,362
Accrual for purchases of fixed assets			2,052				3,496

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

Investor Contact:ICRBrendon Frey (203) 682-8200

Source: Zumiez Inc

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