Zumiez is now forecasting a full-year net loss and annual sales to fall more than 8 percent after reporting a net loss of $2.23 million against a profit of $6.9 million in Q3 ended Oct. 28. The operating loss was $157,000 against $10.4 million as gross margin contracted 70 basis points to 33.8 percent from 34.5 percent that was impacted by a 50-basis point drop in product margins due to promotions aimed at clearing excess inventory.
Third-quarter net sales declined by 8.9 percent to $216.3 million from $237.6 million, impacted by a 12 percent decline in North America to $181.6 million, where comparable year-over-year sales contracted by 10.7 percent. But the sales drop-off was less than a 17 percent decline in Q1 and a 12 percent contraction in Q2. The combined European and Australian businesses, Blue Tomato and Fast Times, respectively, generated a 5 percent constant-currency sales increase to $34.8 million in the period on a 0.3 percent comp decline.
Meanwhile, through the first 31 days of Q4, the group said total sales were running 5 percent lower than the year-ago period, with comps down by 6.0 percent. Sales in Europe and Australia combined were up 2 percent on a constant-currency basis but down by 7 percent in North America. Except for men’s, all category sales were down year-over-year. But the footwear business is trending better year-over-year.
Zumiez, which operated 771 doors at Q3 end, including 87 Blue Tomato locations in Europe and 25 Fast Times stores in Australia, maintains a plan to open 19 new doors this FY, including 10 in Europe and 4 in Australia.
