Zumiez is intent on enhancing the productivity of its 90 stores across nine countries in Europe, but it admits its strategy was hampered in Q3 by a continuing “difficult cycle” in the market coupled with unfavorable weather that slowed snow-related apparel and hard goods sales.
“We are confident that by focusing on full-price selling for our existing (store) footprint, we can unlock the potential for the business and create value,” CEO Rick Brooks told analysts. “…There’s no doubt that trends emerge locally and grow globally, and our current penetration of the relevant markets is a significant advantage to Zumiez over the long term.”
In Q3 ended Nov. 3, the global retail group that operates under the Zumiez, Blue Tomato, and Fast Times banners, turned an operating profit of $2.37 million against a loss of $157,000. The net profit was $1.16 million against a year-ago loss of $2.23 million. Gross profit improved 140 basis points year-over-year to 35.2 percent from 33.8 percent.
Total Q3 revenues grew by 2.8 percent to $222.5 million from $216.3 million, fueled by a fourth consecutive period of accelerating men’s and women’s sales. Footwear revenues, meanwhile, experienced a “noticeable pick-up in sequential demand.”
Year-on-year, North American sales increased by 2.9 percent to $186.8 million, and sales from European and Australian stores rose by 2.7 percent to $35.7 million. However, comparable Q3 sales for the Europe/Australia business declined by 5.6 percent.
Zumiez, which is on track to introduce 100+ new brands to its customers in 2024, has seen its private label share of business rise to 27 percent of sales versus 23 percent in 2023 and 18 percent in 2022. Brooks told analysts that the group’s FY24 end inventory could grow faster than current sales trends due to potential tariff implications in the US next year under President-elect Trump.
