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ZUMZ Posts Wider-Than-Expected Q1 Loss, 5.5% Y/Y Rise in Comps
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Key Takeaways
ZUMZ reported a Q1 loss of $0.79 per share, missing estimates but improving from last year's $0.86 loss.
Comparable sales rose 5.5% Y/Y, led by higher dollars per transaction and strength in North America.
The gross margin grew 70 bps to 30% on better store occupancy leverage. Women's comps outpaced all categories.
Zumiez Inc. (ZUMZ - Free Report) reported first-quarter fiscal 2025 results, wherein the top line surpassed and the bottom line lagged the Zacks Consensus Estimate. However, both metrics improved year over year. Comparable sales (comps) improved year over year.
More on Zumiez’s Q1 Results
ZUMZ posted a quarterly loss of 79 cents per share, which is wider than the Zacks Consensus Estimate of a loss of 77 cents. However, the bottom line narrowed from a loss of 86 cents in the year-earlier quarter. (Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.)
Total net sales of $184.3 million surpassed the Zacks Consensus Estimate of $183 million and increased 3.9% from $177.4 million in the prior-year quarter. This growth was largely driven by strong performance in the North America business, which remained robust despite growing macroeconomic uncertainty, influenced by global trade policy developments.
Comps rose 5.5% year over year, marking the fourth consecutive quarter of growth. The Zacks Consensus Estimate for comps growth was pegged at 4% for the quarter under review. The overall increase in comps was primarily driven by higher dollars per transaction, partially offset by a decline in the number of transactions. The rise in dollars per transaction was fueled by an increase in average unit retail and a higher number of units per transaction.
From a regional perspective, North America’s net sales improved 4.9% year over year to $149.7 million. Other international sales, comprising Europe and Australia, declined 0.2% year over year to $34.6 million. Excluding the foreign currency translation impacts, North America’s net sales rose 5.2%, while other international net sales slipped 0.1% from the prior-year quarter.
Comps in North America increased 7.4%, marking the fifth consecutive quarter of growth, while international comps declined 2.3% in the quarter under review.
Among product categories, the women's category saw the highest comps increase, followed by men's, footwear and accessories. Conversely, hardgoods was the only category to post a decline in comps.
Insights Into Zumiez’s Margins & Costs
Gross profit jumped 6.6% year over year to $55.3 million, whereas the gross margin expanded 70 bps to 30%. This improvement was mainly due to leverage on store occupancy costs, driven by higher sales.
Selling, general and administrative (SG&A) costs of $75.2 million increased 4.3% year over year. As a percentage of sales, SG&A costs increased 20 bps from the year-ago quarter to 40.8%. The rise was primarily due to one-time $2.9-million legal costs related to the settlement of a wage and hour lawsuit in California, which added 160 bps. This was partially offset by 70 bps of leverage in non-wage store operating costs, 30 bps in corporate costs, and 40 bps from efficiencies in areas such as wages, training and annual incentive compensation.
Zumiez reported an operating loss of $19.9 million versus an operating loss of $20.2 million in the year-ago quarter.
ZUMZ Stock's Past 3-Month Performance
Image Source: Zacks Investment Research
ZUMZ’s Financial Health
As of May 3, 2025, cash and current marketable securities totaled $101 million, down from $146.6 million as of May 4, 3, 2024. The decline was primarily due to $50.4 million in share repurchases and $14.7 million in capital expenditure, partially offset by $17.2 million in cash generated from operating activities. The company had no debt at the end of the fiscal first quarter.
Total shareholders’ equity was $298.5 million. In the fiscal first quarter, 1.8 million shares were repurchased at an average price of $13.82 per share (including commissions) for total costs of $25.2 million, fully utilizing the buyback authorization approved by the company on March 25. On June 4, the company approved a share repurchase program of up to $15 million, set to continue through June 30, 2026, unless modified by the board.
The company ended the fiscal first quarter with $149.9 million in inventory, up 2.1% from the year-ago quarter.
As of May 31, 2025, Zumiez operated 731 stores, including 570 in the United States, 46 in Canada, 87 in Europe and 28 in Australia. Management intends to open nine stores in fiscal 2025, comprising six in North America, two in Europe and one in Australia. They also plan to close 20 stores in fiscal 2025, including up to 17 in the United States, two in Canada and one in Europe.
Closer Look at Zumiez’s Other Updates
Net sales for the four weeks ended May 31, 2025, increased 0.7% from the same period ended June 1, 2024. Comps rose 1.4% year over year. From a regional perspective, net sales in the North America business increased 2.9%, while net sales in the other international business declined 9.6%. Excluding the impacts of foreign currency translation, North America net sales increased 3%, and other international net sales decreased 12.7% from the prior-year period.
Comps in North America grew 5.1% in the period, whereas comps in the other international segment declined 14.8%. By category, women’s was the strongest performing one in terms of comps, followed by hardgoods. Men’s was the weakest performing category, followed by footwear and accessories.
ZUMZ’s Q2 Guidance
For the second quarter of fiscal 2025, the company expects total sales between $207 million and $214 million, indicating a decrease of 2% to an increase of 2% from the prior-year period’s actual. Comps growth is anticipated to fall between a year-over-year decrease of 1% and an increase of 3%.
The product margin is forecast to improve from that reported in the second quarter of fiscal 2024. However, the company projects an operating loss between $0.7 million and $4 million compared with a loss of $0.4 million in the second quarter of fiscal 2024. The loss per share is expected between 9 cents and 24 cents, whereas it incurred a loss of 4 cents in the prior-year period.
Zumiez’s FY25 Outlook
For fiscal 2025, Zumiez anticipates year-over-year sales growth despite the closure of 33 stores in fiscal 2024 and 20 store closures planned in fiscal 2025, which combined are estimated to have a negative impact on sales of $14.7 million for the year.
The company anticipates modest year-over-year growth in the product margin in fiscal 2025 on top of 70 bps of improvement in fiscal 2024. The company expects to drive additional gross margin leverage through other expenses, such as occupancy, distribution and logistics. Fiscal 2025 SG&A costs, excluding the one-time legal charges, are expected to remain relatively flat as a percentage of sales compared with that reported in fiscal 2024.
The capital expenditure for 2025 is expected between $14 million and $16 million, whereas it reported $15 million in fiscal 2024. Combined, these expectations are projected to drive a year-over-year increase in the operating margin and net profit for fiscal 2025, bringing the company back to profitability. The company stated that under current circumstances and tariff levels, Zumiez believes that achieving its previously mentioned annual expectations for fiscal 2025 is feasible despite increased uncertainty and volatility in the trade environment.
Shares of this Zacks Rank #5 (Strong Sell) company have lost 8.9% in the past three months against the industry’s growth of 5.9%.
Urban Outfitters is a lifestyle specialty retailer that offers fashion apparel and accessories, footwear, home decor and gift products. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for URBN’s fiscal 2025 earnings and sales implies growth of 20.9% and 8%, respectively, from the year-ago actuals. URBN delivered a trailing four-quarter average earnings surprise of 29%.
Canada Goose is a global outerwear brand. GOOS is a designer, manufacturer, distributor and retailer of premium outerwear for men, women and children. It carries a Zacks Rank #2 (Buy) at present.
The Zacks Consensus Estimate for Canada Goose’s current fiscal year’s earnings and sales indicates growth of 10% and 2.9%, respectively, from the year-ago actuals. Canada Goose delivered a trailing four-quarter average earnings surprise of 57.2%.
Allbirds is a lifestyle brand that uses naturally derived materials to make footwear and apparel products. It carries a Zacks Rank of 2 at present.
The Zacks Consensus Estimate for BIRD’s current financial year’s earnings suggests growth of 16.1% from the year-ago actual. The company delivered a trailing four-quarter average earnings surprise of 21.3%.
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ZUMZ Posts Wider-Than-Expected Q1 Loss, 5.5% Y/Y Rise in Comps
Key Takeaways
Zumiez Inc. (ZUMZ - Free Report) reported first-quarter fiscal 2025 results, wherein the top line surpassed and the bottom line lagged the Zacks Consensus Estimate. However, both metrics improved year over year. Comparable sales (comps) improved year over year.
More on Zumiez’s Q1 Results
ZUMZ posted a quarterly loss of 79 cents per share, which is wider than the Zacks Consensus Estimate of a loss of 77 cents. However, the bottom line narrowed from a loss of 86 cents in the year-earlier quarter. (Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.)
Total net sales of $184.3 million surpassed the Zacks Consensus Estimate of $183 million and increased 3.9% from $177.4 million in the prior-year quarter. This growth was largely driven by strong performance in the North America business, which remained robust despite growing macroeconomic uncertainty, influenced by global trade policy developments.
Comps rose 5.5% year over year, marking the fourth consecutive quarter of growth. The Zacks Consensus Estimate for comps growth was pegged at 4% for the quarter under review. The overall increase in comps was primarily driven by higher dollars per transaction, partially offset by a decline in the number of transactions. The rise in dollars per transaction was fueled by an increase in average unit retail and a higher number of units per transaction.
Zumiez Inc. Price, Consensus and EPS Surprise
Zumiez Inc. price-consensus-eps-surprise-chart | Zumiez Inc. Quote
ZUMZ’s Regional & Category Performance
From a regional perspective, North America’s net sales improved 4.9% year over year to $149.7 million. Other international sales, comprising Europe and Australia, declined 0.2% year over year to $34.6 million. Excluding the foreign currency translation impacts, North America’s net sales rose 5.2%, while other international net sales slipped 0.1% from the prior-year quarter.
Comps in North America increased 7.4%, marking the fifth consecutive quarter of growth, while international comps declined 2.3% in the quarter under review.
Among product categories, the women's category saw the highest comps increase, followed by men's, footwear and accessories. Conversely, hardgoods was the only category to post a decline in comps.
Insights Into Zumiez’s Margins & Costs
Gross profit jumped 6.6% year over year to $55.3 million, whereas the gross margin expanded 70 bps to 30%. This improvement was mainly due to leverage on store occupancy costs, driven by higher sales.
Selling, general and administrative (SG&A) costs of $75.2 million increased 4.3% year over year. As a percentage of sales, SG&A costs increased 20 bps from the year-ago quarter to 40.8%. The rise was primarily due to one-time $2.9-million legal costs related to the settlement of a wage and hour lawsuit in California, which added 160 bps. This was partially offset by 70 bps of leverage in non-wage store operating costs, 30 bps in corporate costs, and 40 bps from efficiencies in areas such as wages, training and annual incentive compensation.
Zumiez reported an operating loss of $19.9 million versus an operating loss of $20.2 million in the year-ago quarter.
ZUMZ Stock's Past 3-Month Performance
Image Source: Zacks Investment Research
ZUMZ’s Financial Health
As of May 3, 2025, cash and current marketable securities totaled $101 million, down from $146.6 million as of May 4, 3, 2024. The decline was primarily due to $50.4 million in share repurchases and $14.7 million in capital expenditure, partially offset by $17.2 million in cash generated from operating activities. The company had no debt at the end of the fiscal first quarter.
Total shareholders’ equity was $298.5 million. In the fiscal first quarter, 1.8 million shares were repurchased at an average price of $13.82 per share (including commissions) for total costs of $25.2 million, fully utilizing the buyback authorization approved by the company on March 25. On June 4, the company approved a share repurchase program of up to $15 million, set to continue through June 30, 2026, unless modified by the board.
The company ended the fiscal first quarter with $149.9 million in inventory, up 2.1% from the year-ago quarter.
As of May 31, 2025, Zumiez operated 731 stores, including 570 in the United States, 46 in Canada, 87 in Europe and 28 in Australia. Management intends to open nine stores in fiscal 2025, comprising six in North America, two in Europe and one in Australia. They also plan to close 20 stores in fiscal 2025, including up to 17 in the United States, two in Canada and one in Europe.
Closer Look at Zumiez’s Other Updates
Net sales for the four weeks ended May 31, 2025, increased 0.7% from the same period ended June 1, 2024. Comps rose 1.4% year over year. From a regional perspective, net sales in the North America business increased 2.9%, while net sales in the other international business declined 9.6%. Excluding the impacts of foreign currency translation, North America net sales increased 3%, and other international net sales decreased 12.7% from the prior-year period.
Comps in North America grew 5.1% in the period, whereas comps in the other international segment declined 14.8%. By category, women’s was the strongest performing one in terms of comps, followed by hardgoods. Men’s was the weakest performing category, followed by footwear and accessories.
ZUMZ’s Q2 Guidance
For the second quarter of fiscal 2025, the company expects total sales between $207 million and $214 million, indicating a decrease of 2% to an increase of 2% from the prior-year period’s actual. Comps growth is anticipated to fall between a year-over-year decrease of 1% and an increase of 3%.
The product margin is forecast to improve from that reported in the second quarter of fiscal 2024. However, the company projects an operating loss between $0.7 million and $4 million compared with a loss of $0.4 million in the second quarter of fiscal 2024. The loss per share is expected between 9 cents and 24 cents, whereas it incurred a loss of 4 cents in the prior-year period.
Zumiez’s FY25 Outlook
For fiscal 2025, Zumiez anticipates year-over-year sales growth despite the closure of 33 stores in fiscal 2024 and 20 store closures planned in fiscal 2025, which combined are estimated to have a negative impact on sales of $14.7 million for the year.
The company anticipates modest year-over-year growth in the product margin in fiscal 2025 on top of 70 bps of improvement in fiscal 2024. The company expects to drive additional gross margin leverage through other expenses, such as occupancy, distribution and logistics. Fiscal 2025 SG&A costs, excluding the one-time legal charges, are expected to remain relatively flat as a percentage of sales compared with that reported in fiscal 2024.
The capital expenditure for 2025 is expected between $14 million and $16 million, whereas it reported $15 million in fiscal 2024. Combined, these expectations are projected to drive a year-over-year increase in the operating margin and net profit for fiscal 2025, bringing the company back to profitability. The company stated that under current circumstances and tariff levels, Zumiez believes that achieving its previously mentioned annual expectations for fiscal 2025 is feasible despite increased uncertainty and volatility in the trade environment.
Shares of this Zacks Rank #5 (Strong Sell) company have lost 8.9% in the past three months against the industry’s growth of 5.9%.
Three Picks You Can't Miss
Some better-ranked stocks are Urban Outfitters Inc. (URBN - Free Report) , Canada Goose (GOOS - Free Report) and Allbirds Inc. (BIRD - Free Report) .
Urban Outfitters is a lifestyle specialty retailer that offers fashion apparel and accessories, footwear, home decor and gift products. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for URBN’s fiscal 2025 earnings and sales implies growth of 20.9% and 8%, respectively, from the year-ago actuals. URBN delivered a trailing four-quarter average earnings surprise of 29%.
Canada Goose is a global outerwear brand. GOOS is a designer, manufacturer, distributor and retailer of premium outerwear for men, women and children. It carries a Zacks Rank #2 (Buy) at present.
The Zacks Consensus Estimate for Canada Goose’s current fiscal year’s earnings and sales indicates growth of 10% and 2.9%, respectively, from the year-ago actuals. Canada Goose delivered a trailing four-quarter average earnings surprise of 57.2%.
Allbirds is a lifestyle brand that uses naturally derived materials to make footwear and apparel products. It carries a Zacks Rank of 2 at present.
The Zacks Consensus Estimate for BIRD’s current financial year’s earnings suggests growth of 16.1% from the year-ago actual. The company delivered a trailing four-quarter average earnings surprise of 21.3%.