Zumiez (ZUMZ) Q1 2025 earnings summary

Executive summary

• Net sales for Q1 2024 were $177.4 million, down 3% year-over-year, with both sales and EPS exceeding guidance and sequential improvement in trends, driven by positive North America performance and improved merchandise margins in Europe.

• Net loss was $16.8 million ($0.86 per share), an improvement from $18.4 million ($0.96 per share) in Q1 2023, outperforming guidance.

• Gross profit increased to $51.9 million (29.3% of sales), up from $49.4 million (27%) last year.

• SG&A expenses rose to $72.1 million (40.6% of sales), up from $70.7 million (38.7%), mainly due to higher incentive compensation and wage rates.

• Strategic focus remains on reinvigorating top-line growth, expanding private label, and optimizing profitability, especially in Europe and North America.

Financial highlights

• North America sales decreased 0.9% while international sales fell 10.8% year-over-year; U.S. sales were $133.9 million, Europe $29.6 million, Canada $8.8 million, and Australia $5.1 million.

• Comparable sales declined 2.4% overall; North America comps up 0.3%, international down 13%.

• Operating loss improved to $20.2 million (11.3% of sales) from $21.4 million (11.7%).

• Cash and current marketable securities totaled $146.6 million at quarter-end, with $74.9 million in cash and $71.8 million in marketable securities.

• Inventory ended at $146.8 million, up from $128.8 million at the start of the year but down 0.7% year-over-year.

Outlook and guidance

• Q2 2024 net sales projected between $199–$204 million, with loss per share expected between $0.30 and $0.40.

• Full-year guidance withheld due to macro uncertainty, but expectations are for total sales growth and improved product margin in 2024, with a return to positive operating margins.

• Plans to open 10 new stores and close 20-25, mainly in North America; capital expenditures for 2024 expected at $14–$16 million.

• Management expects existing liquidity and cash flow to be sufficient for operational and capital needs for at least the next 12 months.