) - a mall-based specialty retailer of action sports apparel,
footwear, equipment and accessories - reported adjusted earnings
of 75 cents per share for fourth-quarter 2012, surpassing the
Zacks Consensus Estimate of 73 cents. Bottom-line results
benefited from the successful execution of the growth strategies
outlined at the onset of fiscal 2012 as well as contributions
from the Blue Tomato operations.
Reported earnings, including a charge of 2 cents per share and
net gain of 1 cent a share associated with the acquisition of
Blue Tomato, were 74 cents compared with 60 cents reported in the
Quarter in Detail
Net sales increased 22.1% to $224.4 million from $183.9 million
in the comparable year-ago quarter. The year-over-year growth in
sales was primarily driven by the addition of 56 new stores
through fiscal 2012, offset by weaker comparable store sales
(comps). Moreover, quarterly sales were above the Zacks Consensus
Estimate of $222.0 million.
Comparable store sales (comps) dipped 1.0% compared with an
increase of 9.7% reported in the year-ago quarter. The company's
comps suffered due to a decline in comparable store transactions
offset by an increase in dollars per unit, which mainly benefited
from a higher average per unit retail price and increase in units
per transaction year over year.
During the quarter, gross profit increased 19.8% year over year
to $85.7 million, but as a percentage of sales it contracted 70
basis points (bps) to 38.2%. The year-over-year decline in the
gross profit margin was mainly the result of increased web
fulfillment and shipping cost as a percent of total sales,
including the Blue Tomato e-Commerce operation, partially offset
by decline in occupancy cost. However, excluding the impact of
the Blue Tomato acquisition, product margin improved slightly.
Zumiez's selling, general and administrative (SG&A) expenses
increased 23.4% year over year, while as a percentage of sales it
expanded 20 bps to 22.1% compared with 21.9% in the comparable
quarter of fiscal 2011. The increase resulted from a rise in web
operation costs as a percentage of sales, including the Blue
Tomato operations, offset in part by lower fixed costs.
Operating profit for the quarter increased 15.3% year over year
to $36.1 million, while as percentage of sales it contracted 90
bps to 16.1%.
Fiscal 2012 Synopsis
For fiscal 2102, Zumiez reported adjusted earnings of $1.58 per
share, above the Zacks Consensus Estimate of $1.55 per share. On
a reported basis, the company earned $1.35 per share compared
with $1.20 per share in fiscal 2011.
Net sales for fiscal 2012 escalated 20.4% year over year to
$669.4 million, surpassing the Zacks Consensus Estimate of $668
million. The improvement was driven by a 5.0% increase in comps
as well as continued store expansions.
As of Feb 2, 2013, cash and marketable securities were $103.2
million, a sharp decline of 40.3% from $172.8 million as of Jan
28, 2012. The decline is attributed to the use of cash by the
company to fund its Blue Tomato acquisition as well as capital
expenditures and stock repurchases. During fiscal 2012, the
company generated cash flow of $66.2 million from its operational
During the quarter, Zumiez bought back about 1.3 million shares
for a total of $25.8 million, with an average price of $20.43.
During the year, the company completed its $22 million buyback
authorization that was announced in Nov 2012, as well as it
purchased shares worth $4 million under its $20 million
authorization announced in Dec 2012. As of Feb 2, 2013, the
company had $16 million remaining under its Dec 2012
authorization of $20 million.
Zumiez revealed its sales and earnings guidance for the first
quarter of fiscal 2013. Management anticipates first-quarter
revenues to be in the range of $141-$144 million, while comps are
likely to decline in the mid-single-digit range.
Based on sales projections for the quarter, the company expects
earnings per share to come in the band of 4-7 cents. The earnings
expectation also includes estimated charges of 4 cents related to
the Blue Tomato acquisition.
The company plans to expand its store base by opening 60 new
stores in fiscal 2013, comprising up to 10 stores in Canada and 6
A Look at Zacks Rank
Zumiez holds a Zacks Rank #2 (Buy). Apart from this, other stocks
performing well in the retail space include
New York & Company Inc.
Vera Bradley Inc.
), all of which carry a Zacks Rank #2 (Buy).
EXPRESS INC (EXPR): Free Stock Analysis
NEW YORK & CO (NWY): Free Stock Analysis
VERA BRADLEY (VRA): Free Stock Analysis
ZUMIEZ INC (ZUMZ): Free Stock Analysis Report
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