Comparable sales for North America increased by 5.1 percent in the period while comparable international sales slumped by 14.8 percent.
Zumiez reported sales growth of just 0.7 percent in the four weeks ended May 31, at the start of its fiscal second quarter, with growth in its still resilient North American business largely offset by weakness internationally. Comparable sales were up by 1.4 percent.
From a regional perspective, North American sales in the four-week period rose by a reported 2.9 percent, or 3.0 percent at constant exchange rates, showing resilience despite growing macroeconomic uncertainty amid US import tariffs. “Other international” sales, consisting of the company’s business in Europe and Australia, instead decreased by a reported 9.6 percent and were 12.7 percent lower at constant rates. Comparable sales for North America increased by 5.1 percent in the period while comparable international sales slumped by 14.8 percent.
Tougher start
The global retailer, which operates the Zumiez, Blue Tomato and Fast Times banners, highlighted continuing challenges in the market environment in Europe. “After making progress in 2024 in sales, product margin and operating results, 2025 is off to a tougher start,” said Richard Brooks, CEO, in a first-quarter earnings conference call. “With the slower start, we are actively working to drive the top line through new and unique product selection, while also remaining focused on full price selling and controlling costs.”
In the three months ended May 3, global sales increased by 3.9 percent to $184.3 million, with comparable sales up by 5.5 percent. North American sales rose by 4.9 percent to $149.7 million while other international sales slipped by 0.2 percent to $34.7 million. Comparable sales in the two markets were up by 7.4 percent and down by 2.3 percent, respectively.
The gross margin widened by 0.70 percentage points to 30.0 percent, primarily driven by leverage of store occupancy costs on higher sales. The operating loss inched down to $19.9 million from $20.2 million the year earlier, and the net loss to $14.3 million from $16.8 million, as the loss per diluted share fell to $0.79 from $0.86. The first quarter of 2025 was negatively impacted by a $2.9 million, or approximately $0.13 per diluted share, tied to the settlement of a wage and hours lawsuit in California.
Based on results to date, current tariff rates, and actions taken to mitigate higher costs from tariffs, Zumiez anticipates sales in the full second quarter of $207-214 million, representing a negative two percent to a positive two percent change from the year earlier. Comparable sales growth is seen between a negative one percent and a positive three percent. The second-quarter operating loss is seen widening to $0.7-4.0 million compared to $0.4 million the year earlier, and the loss per diluted share to $0.09-$0.24 from a $0.04 loss the prior year.
Still sees full-year sales growth
Zumiez still expects to see sales growth for the full year, despite the closure of 33 stores in fiscal year 2024 and the planned closure of a further 20 in 2025, which combined are expected to have a negative impact of $14.7 million on fiscal 2025 sales. It also expects to see a year-over-year increase in operating margins and net profit, bringing the company back to profitability. It confirmed plans to open nine new stores during the year, including six in North America, two in Europe, and one in Australia.
