Zumiez, the American action sports retailer that owns Blue Tomato in Europe and Fast Times in Australia, performed well in the third fiscal quarter ended on Oct. 31, thanks to a good performance outside its core North American market. Its net income soared by 51.5 percent from the year-ago quarter to $29.1 million, on revenues that progressed by 2.6 percent to $271.0 million.
While sales in North America rose by 1 percent to $240.3 million, Blue Tomato and Fast Times recorded a combined growth of 20 percent to $30.6 million, or a gain of 13 percent in constant currencies.
Due to store closures linked to the pandemic, stores were only open for about 95 percent of normal opening hours during the third quarter. Comparable sales were up by 8.1 percent, with a 2.2 percent increase in physical stores and a jump of 39.6 percent online.
After a challenging start to the third quarter owing to the delayed start to the back-to-school, sales were positive in both September and October due to late seasonal demand. Hardgoods was the strongest category, followed by men’s, accessories and women’s. However, footwear struggled, weighed down by supply chain challenges during the pandemic.
The company made efforts to tighten spending and boost margins. The gross margin rose by 3.2 percentage points to 39.0 percent, led by improvements in product margin, occupancy and distribution, while operating expenses were trimmed by 3 percent.
The group declined to provide a guidance for the full year, but said that sales for the 31 days ended on Dec. 1, 2020 were down by about 3.9 percent from the same period in 2019, with comparable sales declining by 1.7 percent. Open store-days in the U.S. were down by 2 percent in the period due to restrictions, while in Europe 17 percent of store-days were closed, sending turnover down by 30 percent, but Australia exceeded expectations.
The company expects to finish the financial year with an extra 12 stores including three Zumiez units, seven Blue Tomatoes and two Fast Times. Two of the new Blue Tomato stores are located in the Finnish cities of Tempere and Turku. The other new Blue Tomato store is in The Hague. With these openings, the European action sports retailer now has three stores in Finland and three in the Netherlands. Blue Tomato had 54 physical stores at the end of the quarter, in addition to its very active website.