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Zumiez Q2 Earnings Miss on U.S. Weakness and Footwear Softness
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Key Takeaways
ZUMZ's second-quarter sales fell 2.5% as weaker U.S. demand and customer traffic weighed on results.
Footwear drove 70% of the U.S. sales decline, with accessories and men's the strongest categories.
ZUMZ expects third-quarter EPS between breakeven and 10 cents, versus 55 cents in the prior-year quarter.
Zumiez Inc. (ZUMZ - Free Report) reported second-quarter fiscal 2026 results, wherein the top line missed the Zacks Consensus Estimate and declined year over year, while the bottom line also missed the same.
Zumiez posted a loss of 17 cents per share, wider than the year-ago loss of 6 cents and the Zacks Consensus Estimate of a loss of 14 cents. The bottom line missed the consensus mark by 21.4%.
Net sales declined 2.5% year over year to $209 million from $214.3 million and missed the consensus estimate of $212 million by 1.4%. U.S. weakness, particularly in footwear and customer traffic, weighed on results. Inventory was $157.3 million compared with $157.7 million a year ago.
Second-quarter net sales were $209 million, down from $214.3 million in the year-ago quarter. Management attributed the decline primarily to weaker performance in the United States, while growth across international markets partly cushioned the pressure.
The consolidated sales decline was due to fewer transactions. Dollars per transaction increased from the prior-year period as higher units per transaction more than offset a decrease in average unit retail. Management said that footwear remained the most significant headwind in the U.S. business.
Zumiez's Footwear Trends Pressure Performance
Accessories was the strongest positive-performing merchandise category during the quarter, followed by men's. Footwear was the largest negative-performing category, followed by hardgoods and women's merchandise.
Management said that footwear has been challenged since the second quarter of fiscal 2025. During the second quarter and back-to-school periods of fiscal 2026, footwear accounted for 70% of the total U.S. sales decline from the comparable prior-year period. Zumiez is working with brand partners and its private-label portfolio to introduce more differentiated merchandise.
ZUMZ's Gross Margin Contracts on Lower Sales
Gross profit declined 2.9% to $73.9 million from $76 million in the second quarter of fiscal 2025. Gross margin narrowed 20 basis points to 35.3% from 35.5% in the prior-year quarter.
The margin contraction reflected 60 basis points of deleverage in store occupancy costs due to lower sales. This was partly offset by a 50-basis-point benefit from tariff refunds. The year-over-year comparison underscores the impact of softer sales volumes on fixed store costs.
Zumiez's Operating Results Weaken Year Over Year
SG&A expenses decreased 1% to $75.2 million from $75.9 million a year earlier. However, SG&A expenses increased to 35.9% of sales from 35.4% in the prior-year period as weaker revenues reduced expense leverage.
ZUMZ recorded an operating loss of $1.3 million against operating income of $0.1 million a year ago.
ZUMZ's Six-Month Sales Improve Despite Wider Loss
For the first six months of fiscal 2026, net sales increased 0.9% to $402.3 million from $398.6 million in the first six months of fiscal 2025. Gross profit rose 2.9% to $135.2 million from $131.3 million, while gross margin improved to 33.6% from 32.9%.
The six-month operating loss narrowed to $16.5 million from $19.8 million. However, net loss widened to $16 million from $15.3 million, while loss per share increased to $1 from 88 cents in the year-ago period.
Zumiez's Liquidity and Inventory Remain in Focus
Cash and current marketable securities totaled $97.3 million as of Aug. 1, 2026, down from $106.7 million as of Aug. 2, 2025. Total shareholders' equity was $279 million compared with $292.4 million a year earlier.
Inventory decreased to $157.3 million from $157.7 million in the prior-year period. For the first six months, cash used for common-stock repurchases totaled $29.5 million compared with $32.7 million a year ago.
ZUMZ's Q3 Earnings Outlook Points to Further Pressure
For the third quarter of fiscal 2026, Zumiez expects earnings per share between breakeven and 10 cents. This compares with earnings of 55 cents per share in the third quarter of fiscal 2025, reflecting management's cautious stance following weaker back-to-school trends.
For fiscal 2026, the company expects depreciation and amortization, excluding non-cash lease expense, to be about $19.2 million compared with $21.3 million in fiscal 2025.
Shares of this Zacks Rank #4 (Sell) company have lost 9.2% over the past three months compared with the industry’s decline of 14.3%.
Image Source: Zacks Investment Research
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The Zacks Consensus Estimate for FOSL’s current fiscal-year sales indicates a decline of 4%, while the same for earnings indicates growth of 96.7% from the year-ago figures. FOSL delivered a trailing four-quarter negative earnings surprise of 236.2%, on average.
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The consensus estimate for Boot Barn’s current fiscal-year sales and earnings implies growth of 15.7% and 22.6%, respectively, from the year-ago figures. BOOT delivered a trailing four-quarter earnings surprise of 11.4%, on average.
View the Zacks #1 Rank List
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Zumiez Q2 Earnings Miss on U.S. Weakness and Footwear Softness
Key Takeaways
Zumiez Inc. (ZUMZ - Free Report) reported second-quarter fiscal 2026 results, wherein the top line missed the Zacks Consensus Estimate and declined year over year, while the bottom line also missed the same.
Zumiez posted a loss of 17 cents per share, wider than the year-ago loss of 6 cents and the Zacks Consensus Estimate of a loss of 14 cents. The bottom line missed the consensus mark by 21.4%.
Net sales declined 2.5% year over year to $209 million from $214.3 million and missed the consensus estimate of $212 million by 1.4%. U.S. weakness, particularly in footwear and customer traffic, weighed on results. Inventory was $157.3 million compared with $157.7 million a year ago.
Zumiez Inc. Price, Consensus and EPS Surprise
Zumiez Inc. price-consensus-eps-surprise-chart | Zumiez Inc. Quote
ZUMZ's Sales Decline as U.S. Demand Softens
Second-quarter net sales were $209 million, down from $214.3 million in the year-ago quarter. Management attributed the decline primarily to weaker performance in the United States, while growth across international markets partly cushioned the pressure.
The consolidated sales decline was due to fewer transactions. Dollars per transaction increased from the prior-year period as higher units per transaction more than offset a decrease in average unit retail. Management said that footwear remained the most significant headwind in the U.S. business.
Zumiez's Footwear Trends Pressure Performance
Accessories was the strongest positive-performing merchandise category during the quarter, followed by men's. Footwear was the largest negative-performing category, followed by hardgoods and women's merchandise.
Management said that footwear has been challenged since the second quarter of fiscal 2025. During the second quarter and back-to-school periods of fiscal 2026, footwear accounted for 70% of the total U.S. sales decline from the comparable prior-year period. Zumiez is working with brand partners and its private-label portfolio to introduce more differentiated merchandise.
ZUMZ's Gross Margin Contracts on Lower Sales
Gross profit declined 2.9% to $73.9 million from $76 million in the second quarter of fiscal 2025. Gross margin narrowed 20 basis points to 35.3% from 35.5% in the prior-year quarter.
The margin contraction reflected 60 basis points of deleverage in store occupancy costs due to lower sales. This was partly offset by a 50-basis-point benefit from tariff refunds. The year-over-year comparison underscores the impact of softer sales volumes on fixed store costs.
Zumiez's Operating Results Weaken Year Over Year
SG&A expenses decreased 1% to $75.2 million from $75.9 million a year earlier. However, SG&A expenses increased to 35.9% of sales from 35.4% in the prior-year period as weaker revenues reduced expense leverage.
ZUMZ recorded an operating loss of $1.3 million against operating income of $0.1 million a year ago.
ZUMZ's Six-Month Sales Improve Despite Wider Loss
For the first six months of fiscal 2026, net sales increased 0.9% to $402.3 million from $398.6 million in the first six months of fiscal 2025. Gross profit rose 2.9% to $135.2 million from $131.3 million, while gross margin improved to 33.6% from 32.9%.
The six-month operating loss narrowed to $16.5 million from $19.8 million. However, net loss widened to $16 million from $15.3 million, while loss per share increased to $1 from 88 cents in the year-ago period.
Zumiez's Liquidity and Inventory Remain in Focus
Cash and current marketable securities totaled $97.3 million as of Aug. 1, 2026, down from $106.7 million as of Aug. 2, 2025. Total shareholders' equity was $279 million compared with $292.4 million a year earlier.
Inventory decreased to $157.3 million from $157.7 million in the prior-year period. For the first six months, cash used for common-stock repurchases totaled $29.5 million compared with $32.7 million a year ago.
ZUMZ's Q3 Earnings Outlook Points to Further Pressure
For the third quarter of fiscal 2026, Zumiez expects earnings per share between breakeven and 10 cents. This compares with earnings of 55 cents per share in the third quarter of fiscal 2025, reflecting management's cautious stance following weaker back-to-school trends.
For fiscal 2026, the company expects depreciation and amortization, excluding non-cash lease expense, to be about $19.2 million compared with $21.3 million in fiscal 2025.
Shares of this Zacks Rank #4 (Sell) company have lost 9.2% over the past three months compared with the industry’s decline of 14.3%.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks have been discussed below:
FIGS, Inc. (FIGS - Free Report) operates as a direct-to-consumer healthcare apparel and lifestyle company in the United States and internationally. At present, FIGS carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for FIGS’s current fiscal-year sales and earnings implies growth of 18.2% and 89.5%, respectively, from the year-ago figures. FIGS has delivered a trailing four-quarter earnings surprise of 201.8%, on average.
Fossil Group, Inc. (FOSL - Free Report) designs, develops, markets, and distributes consumer fashion accessories in the United States, Europe, Asia, and internationally. At present, FOSL carries a Zacks Rank of 2.
The Zacks Consensus Estimate for FOSL’s current fiscal-year sales indicates a decline of 4%, while the same for earnings indicates growth of 96.7% from the year-ago figures. FOSL delivered a trailing four-quarter negative earnings surprise of 236.2%, on average.
Boot Barn Holdings, Inc. (BOOT - Free Report) operates specialty retail stores in the United States and internationally. At present, Boot Barn carries a Zacks Rank of 2.
The consensus estimate for Boot Barn’s current fiscal-year sales and earnings implies growth of 15.7% and 22.6%, respectively, from the year-ago figures. BOOT delivered a trailing four-quarter earnings surprise of 11.4%, on average.