Zumiez Inc. Reports Q3 Fiscal 2024 Net Income of $1.2 Million, Sales Up 2.9%

Zumiez Inc. reported its financial results for the third quarter of fiscal 2024, revealing a net income of $1.2 million, or $0.06 per diluted share, compared to a net loss of $2.2 million, or $0.12 per diluted share, in the same period last year. The company's net sales for the three months ended November 2, 2024, reached $222.5 million, marking a 2.9% increase from $216.3 million in the prior year. This growth was primarily driven by a 7.5% increase in comparable sales in North America, although it was partially offset by a retail calendar shift that moved a high-volume back-to-school week into the second quarter.

For the nine months ending November 2, 2024, Zumiez reported net sales of $610.0 million, up 2.8% from $593.7 million in the same period last year. The increase was attributed to a 4.2% rise in North American sales, while international sales saw a decline of 3.9%. Gross profit for the nine-month period improved to $202.0 million, a 9.6% increase from $184.2 million, with gross profit margins rising to 33.1%. However, the company recorded a net loss of $16.5 million for the nine months, an improvement from a loss of $29.1 million in the previous year.

Operationally, Zumiez continues to expand its footprint, operating 752 stores globally as of November 2, 2024, with 592 in the U.S., 87 in Europe, 46 in Canada, and 27 in Australia. The company has also been active in managing its inventory, which increased to $187.2 million from $128.8 million, reflecting a strategic decision to prepare for anticipated sales growth. The increase in inventory was accompanied by a rise in trade accounts payable, which jumped to $72.5 million from $38.9 million, indicating a shift in purchasing strategy.

The company has also undertaken a share repurchase program, utilizing the full $25 million authorized to buy back shares, which may impact its stock liquidity and shareholder dynamics. Zumiez's cash and cash equivalents decreased to $48.5 million from $88.9 million, while marketable securities also saw a decline. The company anticipates spending between $14 million and $16 million on capital expenditures in fiscal 2024, primarily for new store openings and remodels.

Looking ahead, Zumiez remains cautious about the economic environment, which has been characterized by fluctuating consumer confidence and inflationary pressures. The company plans to continue focusing on enhancing customer engagement and optimizing its store network while navigating the challenges posed by changing market conditions and consumer preferences.