US action sports retailer Zumiez posts profit recovery in fiscal 2025

Zumiez Inc. returned to annual profitability in fiscal 2025, closing a year in which comparable sales rose 4.3 percent and gross margins recovered, reversing a net loss posted in the prior fiscal year. The results, reported on March 12, signal a meaningful step in the Washington-based retailer’s operational turnaround — though management acknowledged further work remains to reach historical performance levels.

Full-year net sales for the 52 weeks ended January 31, 2026 reached $929.1 million (approximately €852 million*), up 4.5 percent from $889.2 million in fiscal 2024. Net income came in at $13.4 million (approximately €12.3 million*), compared with a net loss of $1.7 million in the prior year. The recovery was partly offset by a $3.6 million settlement of a California wage and hours lawsuit, which reduced diluted earnings per share by approximately $0.15.

Fourth quarter: margin expansion leads the result

The fourth quarter delivered the sharpest performance of the year. Net sales for the 13 weeks ended January 31, 2026 rose 4.4 percent to $291.3 million (approximately €267 million*), while gross margin expanded 200 basis points to 38.2 percent — a meaningful improvement that reflected disciplined full-price selling rather than promotional activity. North American comparable sales increased 5.5 percent in the quarter; the overall comparable sales figure was 2.2 percent, diluted by softer international performance relative to the domestic business.

Diluted earnings per share for the quarter increased 48.7 percent to $1.16, from $0.78 in the comparable prior-year period. Net income for the quarter rose 32.5 percent to $19.6 million (approximately €18 million*).

European operations improve on product margin

Blue Tomato, Zumiez’s European subsidiary, contributed a 250-basis-point improvement in product margin year over year in the fourth quarter, according to Chief Executive Officer Rick Brooks. Brooks attributed the gain to a focus on assortment quality and full-price discipline — the same levers being applied across the North American business.

However, the European network is set for further rationalization. In fiscal 2026, the company plans to close approximately five stores in Europe, as part of a broader footprint reduction that includes the closure of around 20 US locations. Only five new stores are planned globally, all in North America. As of February 28, Zumiez operated 83 stores in Europe under the Blue Tomato brand, alongside 560 in the United States, 45 in Canada, and 28 in Australia under the Fast Times banner.

Capital position and shareholder returns

The company ended the year with cash and current marketable securities of $160.6 million (approximately €147 million*), up from $147.6 million a year earlier, driven primarily by stronger operating cash flow. During fiscal 2025, Zumiez repurchased 2.7 million shares at an average cost of $14.18 per share, for a total outlay of $38.3 million (approximately €35 million*).

On March 11, the board approved a new $40 million (approximately €36.7 million*) stock repurchase program, running through January 2028, superseding the prior authorization.

Early fiscal 2026 momentum

The first four weeks of fiscal 2026, ended February 28, recorded a 9.8 percent increase in total sales and a 7.5 percent gain in comparable sales, with North American comps up 6.0 percent and other international comps up 13.2 percent. For the full first quarter ending May 2, 2026, the company projects net sales of $189 million to $193 million and a diluted loss per share of $0.77 to $0.87 — consistent with historical seasonal patterns for the period.