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Zumiez Announces Record Fiscal 2021 First Quarter Results

Net sales for the first quarter ended May 1, 2021, increased 102.6% to $279.1 million from $137.8 million in the first quarter last year. Net income in the first quarter of fiscal 2021 was $26.4 million, compared to a net loss of $21.1 million, in the first quarter of the prior fiscal year.

Zumiez had cash and current marketable securities of $400.4 million compared to cash and current marketable securities of $217.2 million on May 2, 2020. The increase in cash and current marketable securities was driven by cash generated through operations partially offset by capital expenditures.

Net Sales for the month of May just closed with an increase of 42.4% compared to the four-week period ended May 30, 2020.

Due to the continued fast-moving nature of this situation and the uncertainty of impacts on revenue and costs, Zumiez is not providing an outlook at this time for the second quarter or the year.

CEO Rick Brooks commented:

“After demonstrating great resiliency during the height of the pandemic, our business has exceeded pre-COVID levels even as a portion of our global store fleet remains closed. Our performance amidst very challenging conditions over the past year, and more recently as the operating environment has improved, underscores our market leading position and the strength of our business model. Sales trends accelerated as the first quarter progressed driven by our ability to capture meaningful share of the heightened discretionary spending in the U.S. related to government stimulus, especially in our stores, as customers are becoming increasingly comfortable returning to in person shopping. The strong sales gains on both a one- and two-year basis combined with the shift back to our historical channel mix following elevated online spending in 2020, fuelled a dramatic increase in first quarter profitability. We are very pleased with our start to 2021 and are optimistic that we can maintain our positive momentum over the remainder of the year. 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.”

Europe
Q4 European business, saw closures across the important holiday season; a lot of the winter resorts had to shut down and travel restrictions were in place. This was a very challenging quarter to end 2020 after a good nine months at the start of the year. The closure rate in Q1 was higher than what it was in Q4 and higher than what it was in all of 2020 with 60% of the possible days closed with rolling closures across all of Europe, with some just closed pretty much all of Q1. Going into the pandemic, 50% of sales were online and over the course of the year, online channels ramped up. And while sales are not quite where they were hoping they’d be in Q1, they’re not far off and Zumiez remain pretty optimistic about the Europe business. Zumiez are planning to open 12 new stores in Europe in 2021.

Skate Hardgoods
Skate hardgoods has had a 600 basis points increase throughout 2019 and 2020 as a percent of overall sales. With a lot of skateboards sales during the closure period, Zumiez is optimistic about the category for the remainder of the year.

Supply Chain
Following challenges in footwear and hardgoods deliveries, noting that deliveries of these normally take a little bit longer than the printables business, Zumiez are still seeing some delays at port and some other challenges within the ecosystem. Despite these challenges, inventory levels are pretty strong.