Gross margin improved to 36.2 percent and comparable store sales grew to 5.9 percent.
The global retail group, which operates the Zumiez, Blue Tomato, and Fast Times banners, turned an operating profit of $20.1 million against a loss of $32.8 million in Q4 ended Feb. 1. Net income was $14.8 million against a year-ago net loss of $33.5 million on a 1 percent net sales contraction to $279.2 million. Gross margin improved by 190 basis points to 36.2 percent and comparable sales rose for a third consecutive quarter at 5.9 percent.
“Our Q4 results demonstrate meaningful progress in our efforts to improve profitability despite an unexpected lull in demand during the middle of the holiday season,” commented CEO Rick Brooks.
Women’s was the largest growth segment in Q4, but the men’s category had higher comparable sales for a fifth consecutive quarter. Zumiez introduced 120 new brands to its customers last year, down from 150 in 2023, and they constituted a larger percentage of overall sales than they did last year.
In FY24, Zumiez reported an operating profit of $1.95 million against a loss of $64.8 million on a modest 1.6 percent increase in net sales to $889.2 million from $875.5 million. North American sales rose by 3.2 percent to $720 million, Other international sales equaled $169.2 million. The net loss was $1.7 million versus a loss of $62.6 million in FY23. Gross margin widened by 200 basis points to 34.1 percent from 32.1 percent in FY23.
Eye on Europe
Annual results in Europe were described as “challenging” in FY24 by Brooks, who pointed out the segment finished the period with a -4.1 percent comp but with improving sales each quarter that culminated with a +3.7 percent comp gain in Q4.
“Our focus in Europe is returning to full-price, full-margin sales, and we were able to improve product margins by over 100 basis points from the prior year,” Brooks commented before adding, “While there’s still much hard work ahead the improving sales trends, product margins, and operating results indicate that we are making progress (in Europe).”
Tariffs, FY25 Outlook
China is currently the source location for about 50 percent of Zumiez’s merchandise, a figure the company is aiming to reduce through further diversification in 2025.
Zumiez is currently not providing any guidance on its FY25 financials given the uncertainty and volatility in the macro environment. But the company is banking on year-on-year sales growth despite the closure of 33 doors in FY24 and 20 additional ones planned for FY25. Nine stores will be opened this year, including two in Europe, one in Australia, and six in North America.
