管理層發言
Good afternoon, ladies and gentlemen. Welcome to the Zumiez, Inc. Third Quarter Fiscal 2025 Earnings Conference Call. Before we begin, I'd like to remind everyone of the company's safe harbor language. Today's conference call includes comments concerning Zumiez Inc. business outlook and contains forward-looking statements. These forward-looking statements and all other statements that may be made on this call that are not based on historical facts are subject to risks and uncertainties. Actual results may differ materially. Additional information concerning a number of factors that could cause actual results to differ materially from the information that will be discussed is available in Zumiez filings with the SEC. At this time, I will turn the call over to Rick Brooks, Chief Executive Officer. Mr. Brooks?
Hello, and thank you, everyone, for joining us on today's call. With me today is Chris Work, our Chief Financial Officer. I'll begin with remarks about our third quarter performance and the momentum we're building as we head into the holiday season before discussing our strategic priorities. Chris will then take you through the financials and our outlook for the balance of the year. After that, we'll open the call to your questions. We're very pleased with our third quarter performance delivering top and bottom line results that were up meaningfully versus last year and exceeded our expectations. Comparable sales grew 7.6% on top of a 7.5% increase in the year-ago quarter, representing our sixth consecutive quarter of positive comparable sales growth. Once again, it was our North American business fueling our performance as comps in the region accelerated to double digits, bolstering our confidence heading into the critical holiday season. After a successful back-to-school period, sales remained strong throughout the quarter, reflecting the effectiveness of our merchandise assortments and attracting customers who pay full price even during less busy seasons. Encouragingly, our third quarter comp performance was driven by contributions from multiple areas of our business, led by women's and hard goods, which were up strong double digits along with low to mid-single-digit gains from both accessories and men's. High single-digit comps and robust full-price sales boosted gross margin, which combined with improved expense efficiency raised operating income significantly year-over-year. Earnings per share reached $0.55 in the quarter, well above the high end of our guidance of $0.29. Looking forward, we are increasingly confident in closing out the year with strong holiday results. The fourth quarter is off to a good start with comparable sales through this past Tuesday, up 6.6%, including an 8.7% comp gain over the Black Friday, Cyber Monday period, which bodes well for the remainder of the holiday season. We are pleased with the momentum we have seen in our results as the year has progressed and are encouraged that we're now seeing comparable sales growth on top of comparable sales in the prior year. We believe that our strategies have the company well positioned to build on our progress over the near and long term. Due to this, we remain focused on the same three strategic priorities that have driven our success. First, driving revenue growth through customer-focused strategic initiatives. Our commitment to refreshing our product mix with innovative, distinctive offerings continues to generate exceptional customer response. Momentum from introducing over 100 new and emerging brands annually has carried forward into 2025 with these new and emerging brands representing an increasingly important component of our sales mix and validating our merchandising strategy. Private label performance remains a standout success story, continuing to reach new heights and representing our highest penetration levels in company history. This sustained expansion demonstrates our organization's ability to identify emerging trends and create compelling products that resonate with our customers while simultaneously enhancing our margin profile. Our investments in delivering exceptional customer experiences across both physical and digital touch points continue to yield results. The enhanced staff development programs and technological capabilities we've implemented allow us to engage with customers through increasingly personalized and meaningful interactions, strengthening the relationships that have been the foundation of our success. Second, sustaining our rigorous commitment to profitability optimization across our geographic footprint. Within North America, our premium pricing strategies continue to support both margin expansion and market share growth. While the operational improvements we've executed throughout the year are generating meaningful benefits. Our continued focus in this area is key to establishing a more efficient and profitable business framework that positions us for sustained success. Regarding our international operations, while Europe continues to face challenging market conditions, we remain committed to our long-term strategy in these markets. We're actively working to drive revenue through our distinctive product offerings while maintaining our commitment to premium pricing and disciplined expense management. While European comparable sales are down low single digits, the trend line improved from the second quarter, and we continue to see product margin gains through disciplined full-price selling. We have confidence in the long-term potential of these markets, particularly given our ability to identify trends locally in each of the markets before they expand internationally. Third, capitalize on our solid financial foundation to manage volatility by funding strategic expansion. Our financial position remains exceptionally strong, providing us with the flexibility to continue investing in our strategic objectives while delivering value to shareholders. This financial stability enables us to navigate the ongoing uncertainties in the macro environment while simultaneously positioning the company for long-term growth. Despite operating in an environment characterized by economic volatility, evolving trade relationships, and global instability in certain regions, I'm increasingly confident in our ability to generate value for all of our stakeholders. The fundamental strategies that have powered our success throughout our history continue to demonstrate their relevance, and our team's proven adaptability and execution capabilities fuel my optimism about our trajectory. Our direction remains clear and consistent: maintain our dedication to delivering distinctive fashion-forward merchandise through customer connection strategies that have driven our growth while preserving the operational discipline that has strengthened our financial performance. We've demonstrated our resilience through previous market cycles, and I'm confident we're strategically positioned to continue that tradition. Before turning things over to Chris, I want to express my appreciation to our entire organization for their continued commitment and adaptability. Your dedication to our values and our customers remains the foundation for all of our achievements. With that, let me hand things over to Chris for our financial review.
Thanks, Rick, and good afternoon, everyone. I'll begin by reviewing our third quarter results and then update you on our sales trends for the fourth quarter to date. Third quarter net sales reached $239.1 million, reflecting a 7.5% increase from $222.5 million in the same quarter last year. Comparable sales grew by 7.6%. As Rick highlighted, the main contributor to this growth was our North America business, which continues to show strength despite ongoing macroeconomic uncertainties due to global trade policies. In the third quarter, North America net sales totaled $202.8 million, up 8.6% from the previous year. Other international net sales, which include Europe and Australia, reached $36.3 million, a 1.7% increase from last year. When excluding foreign currency translation, North America net sales rose by 8.7%, and other international net sales increased by 3.1% year-over-year. Comparable sales in North America surged by 10%, marking the seventh consecutive quarter of growth in the region. In contrast, other international comparable sales fell by 3.9% in the third quarter but showed sequential improvement from the previous quarter. By category, women's was our strongest performing category, followed by hard goods, men's, and accessories, whereas footwear was the only category to experience a decline in comparable sales. The overall increase in comparable sales stemmed from a rise in dollars per transaction and a higher number of transactions. Dollars per transaction improved this quarter due to higher average unit retail, while units per transaction remained stable year-over-year. Gross profit for the third quarter was $89.8 million, an increase of 14.7% compared to $78.3 million in the same quarter last year. As a percentage of sales, gross profit was 37.6%, up from 35.2% in the third quarter last year, with the 240 basis point increase mainly driven by store occupancy cost leverage from higher sales and the closure of underperforming stores, along with improved product margins and lower inventory shrinkage. SG&A expenses were $78 million, or 32.7% of net sales, in the third quarter, compared to $75.9 million, or 34.1% of net sales, last year. The 140 basis point decline in SG&A expense was attributed to a 110 basis point decrease in non-wage operating costs and 80 basis points of leverage from store wages due to higher sales and closures of underperforming locations, which were partially offset by a 40 basis point increase in annual incentive compensation. Operating income for the third quarter was $11.8 million, or 4.9% of net sales, compared to $2.4 million, or 1.1% of net sales, last year. Net income for the quarter was $9.2 million, equating to $0.55 per share. This contrasts with net income of $1.2 million or $0.06 per share for the third quarter last year. The third quarter of fiscal 2025 included a one-time tax benefit that raised diluted earnings per share by about $0.09. Our effective tax rate for the third quarter was 26.1%, down from 63.4% in the previous year, primarily due to improved operating results and the aforementioned tax item. Moving on to the balance sheet, we ended the quarter with a robust financial position, having cash and current marketable securities of $104.5 million as of November 1, 2025, compared to $99.3 million a year earlier. This increase was mainly due to $50.5 million in cash generated from operating activities and the release of $3 million in restricted cash, partially offset by share repurchases and capital expenditures amounting to $38.3 million and $12.5 million, respectively. We also have no debt on our balance sheet as of November 1, 2025. In the third quarter, we repurchased 300,000 shares at an average cost of $18.61 per share, totaling $5.4 million. Year-to-date through November 1, we bought back 2.7 million shares at an average cost of $14.18 per share, costing $38.3 million. We still have $1.7 million left on our $15 million share repurchase authorization from June. Our inventory at the end of the quarter was $180.7 million, down 3.5% from $187.2 million last year. On a constant currency basis, inventory levels were down 5.1% from the previous year, and we feel confident about our inventory position. Now, let's discuss our results for the fourth quarter to date. For the 31-day period that ended December 2, 2025, net sales rose by 7.5% compared to the same period last year. Comparable sales for this period increased by 6.6%, with favorable foreign exchange impacting total sales growth positively by around 1.7%. Regionally, North America net sales for this period rose by 6.7% compared to the previous year, while international sales increased by 10.6%. Excluding foreign currency effects, North America sales grew by 6.7%, while international sales were up by 2.5%. Comparable sales for North America increased by 7.8%, while international sales' comparable sales rose by 2.6%. In terms of categories, hard goods had the strongest comparable sales performance, followed by women's, accessories, and men's, with footwear as the only category seeing a decline. The increase in comparable sales resulted from higher dollars spent per transaction, although we experienced a drop in the number of transactions. Looking ahead to our fourth quarter outlook for fiscal 2025, I want to remind everyone that establishing our guidance comes with inherent uncertainty and complexity due to various internal and external factors affecting our performance. This is especially true in the current environment with ongoing tariff situations that add complexity to pricing and may limit consumer spending. However, the positive trend in North America gives us confidence heading into the busy holiday season. Still, we find it prudent to balance our current domestic momentum with some caution due to general macroeconomic uncertainties and recent trends showing a decrease in non-peak traffic. We expect total sales for the 13 weeks ending January 31, 2026, to fall between $291 million and $296 million, representing growth of 4% to 6%. Total comparable sales are projected to be in the range of 2.5% to 4%. This indicates continued strength in North America, where we expect comparable sales to be between 4.5% and 6.5%. However, comparable sales in our international business are anticipated to be somewhat challenging as we lap last year’s promotional trends, with expectations of low single-digit declines, while we expect to see an overall increase in product margin dollars year-over-year as we continue to prioritize full-price selling. For this fourth quarter, we expect product margin to show modest improvement compared to last year. We anticipate consolidated operating income to be between 8% and 8.5% of sales, and earnings per share is expected to range from $0.97 to $1.07 compared to $0.78 in the previous year. We forecast a diluted share count of approximately 16.5 million shares, not accounting for any stock repurchases beyond the end of the third quarter. For the full year 2025 results, we've performed well in North America, particularly during the back-to-school season and the beginning of the holiday shopping period—a key indicator for overall holiday performance—although we continue to face challenges with our international business. Overall, barring any significant economic downturn, we anticipate year-over-year total sales growth between 4.5% and 5%. Despite closing 33 stores in fiscal 2024 and planning about 21 closures primarily in late 2025, which together are expected to negatively impact sales by around $15 million for the year, we foresee a 40 to 50 basis point growth in product margin in 2025 on top of last year's 70 basis point improvement. We also plan to achieve additional gross margin leverage through cost savings in areas like occupancy, distribution, and logistics, while maintaining flat SG&A costs as a percentage of sales compared to our fiscal 2024 results, focusing on expense management, and investing in strategic initiatives. This includes a previously mentioned $3.6 million settlement related to a wage and hour lawsuit in California and increased incentive costs reflecting stronger performance. Collectively, these expectations should facilitate a year-over-year increase in operating margins and net profit for fiscal 2025, with anticipated earnings per share ranging from $0.57 to $0.67 compared to a loss of $0.09 in 2024. Our fiscal 2025 expectations include six new store openings—five in North America and one in Australia—while we plan to close around 21 stores, with 18 in the United States, one in Canada, and two in Europe. Our anticipated capital expenditures for 2025 are between $10 million and $12 million, down from $15 million in fiscal 2024 and $20.4 million in fiscal 2023. We expect depreciation and amortization costs, excluding noncash lease expenses, to be around $22 million, in line with the prior year. Although our effective tax rates have fluctuated significantly by quarter, we project our full-year effective tax rate for fiscal 2025 to be approximately 51% to 54%. We currently estimate our diluted share count for the full year to be about 17.2 million shares, again excluding any stock repurchases beyond the end of the third quarter. Now, operator, we would like to open the call for questions.
分析師問答
Our first question will come from the line of Mitch Kummetz from Seaport Research Partners.
Rick, maybe we can start on hard goods. Could you elaborate on what's driving the strong performance there? I think you said it was double-digit comp in the quarter, and it seems to be your leading category for 4Q to date. I mean, the bulk of your hard goods business, if I recall, is skate. I'm wondering if you're getting any contribution from snow in Europe? Or what kind of trends in skate are you seeing in the U.S. that's driving this?
Thanks, Mitch, for the question. The key factor here is skate, which is true across our regions in North America, as well as improvements in Europe and Australia. What we're finally seeing is the reversal of a multiyear negative trend that has been quite painful for us over the last few years. As you know, in 2020, we reached an all-time high, and similar to other sectors like bikes and camping gear, we saw a surge in volume due to the pandemic as people sought outdoor activities. Our skate hard goods business peaked at that point. However, in 2024, we experienced an all-time low. Now, I believe we are witnessing a turnaround in that business, and we are cautiously optimistic about seeing this change unfold over the next few years in line with the typical cycles of skate hard goods. We'll need to see how the holiday season shapes up, but it generally tends to be a strong period for skate as a gift-giving category. Therefore, I feel optimistic about our position there. This marks the long-awaited turnaround after four tough years of significant declines in skate hard goods, which is what we've been anticipating.
That's helpful. And then Chris, on the fourth quarter outlook, you guys were obviously performing well through the first 31 days of the quarter. What are your comp assumptions for the balance of the quarter? I mean, I think you said that you're taking a conservative approach just based on some consumer uncertainty. But can you kind of fill us in on kind of what sort of comp is embedded over the balance of the quarter to get to your guide for 4Q?
Yes. I think, Mitch, as we think about the guide, we are assuming on the North America side that it will just be a little bit softer than what we saw here in November. We saw good November. Obviously, highlighted, as Rick pointed out in his commentary by the Black Friday and Cyber Monday weekend was our strongest point, but we would expect it to slow a little bit here in the interim weeks between Black Friday, Cyber Monday and obviously, the important holiday week right at the end of December. So we are planning just a slight deceleration from November for North America. And on the Europe side, we're really encouraged by where November came in, positive comparable sales and margin growth as well, really magnifying the impact on product margin dollars. But we also know, as we commented in the call, that we had some promotional activity in December and January of last year, which resulted in a benefit to sales, but obviously a detriment to margin. So as we look to anniversary in 2025, we are looking for that trend line to decelerate and turn negative again after being positive in November. But at the same time, driving product margin dollars. So what you would expect to have is product margin increases that would offset that sales decline. And that's what we are planning the business at. So the run rate from here for December and January is a negative comp in Europe that would offset those gains that we had in November.
Got it. And then on the private label business, just maybe speak to the performance in the quarter, where is the penetration today? And how much contribution are you getting from private label in terms of your product margin?
Yes, I'll take a shot at some of the quantifying it and then let Rick add whatever he'd like to add. I mean, we are incredibly encouraged by our private label as we've talked about for a number of quarters here. And I think what we're really proud of our teams here is their ability to drive trend. I think that we are seeing more and more customers come into our store asking for our private label brands because they see them as brands and they're willing to pay full price for the value and what they see in those brands. And so that's an exciting thing for us. As you pointed out, we have seen continued penetration in private label. It's up just right around 200 basis points year-over-year to date, meaning it's growing 2 full percentage points as a percent of our overall sales. So really happy with that and happy with how the business is trending. It does run at a higher product margin, but it also is part of our overall ability to continue to add value for our customers too, where we run four for $135 is a promotion, which is two tops and two bottoms for $135, and that's something that resonates with our consumer. And while we have some branded product in there, it's primarily our private label product that's driving that. So really happy with the trajectory of where private label is at.
I would like to add to Chris' comment that we're focused on a five-year timeframe where we've put substantial effort into private label and redefined our trend process within the organization. What you're witnessing is a strong collective effort from our entire team aimed at meeting the current demands of new brands and their rapid brand cycles. Many new brands never progress to creating cut and sew products; they operate as screenable businesses. Therefore, we are dedicated to owning that segment through our own brands. Additionally, I want to emphasize, as Chris mentioned, that we maintain full price and full margin. In the cut and sew categories within our private label division, we are often the premium price player among our competitors, which demonstrates that we are providing something unique for customers.
And are you seeing more strength on the women's side than the men's? And is that contributing to the outperformance of women's right now? Or is that not really the situation?
We have good strength across our private label brands in both men's and women's. The mix is different in terms of penetration, but there's good strength in both sides.
And our next question is of the line of Jeff Van Sinderen from B. Riley Securities.
Just a follow-up on Mitch's questions on private label. Maybe I missed it. Did you give the penetration of private label roughly what that is now?
Yes. Year-to-date, we're running right just under 31% of total product and to Rick's point earlier, five years ago, we were right around 11% or 12%. So we have seen a large run in private label. Jeff, you've been around the story for some time. We've been over 20% in our past. In fact, we were over 20% as recently as 2015. And we saw that decrease that 11% to 12% across the end of the last decade, really on a heavy brand cycle. And now I think we're seeing our private label drive higher numbers than we've seen in the past because I think it's really hitting on trend.
I know this is a tough question, but where do you think private label penetration peaks out? Does it go to 40? Or are we probably looking at something different? Maybe you didn't expect it to reach 31, I don't know.
I think it's a really good question, Jeff. And one, obviously, as you would expect, we spent a lot of time talking internally. But it will go where the customer wants it to go. I think is kind of our answer here. I mean, we really appreciate working with our brands and the relationship we have with brands. And as we think about the cycles I laid out on your first question, I mean, when we went from 21% to 11% we weren't trying something different. We just saw brands really accelerate and saw brands become more important to our customers. And that's the direction we went in. I will say we grew product margin during that period too. And of course, in this cycle that we're in, we're seeing our private label brands really take off along with some of our brands. I don't want to paint any picture that our comp trajectory is just private label. We definitely have brands that mean a lot in this cycle. But I think we'll kind of let it go where the customer wants it to go, but I don't see some situation where we are more predominantly private label in our stores or anything like that because I think the branded element of what we sell is so important to what we're doing, and it's important to who our consumer is. I mean, you have to remember, this is a consumer that wants to individuate and be unique and different and we've talked over time about 20% to 30% turnover in our top 10 and top 20 because they're on to what's next. And that's an exciting thing about what we sell. It's also a challenging thing about what we sell because you've got to bring in newness. And I’m just really proud of our buying team that they're able to do that both across our private label to bring in newness and also our brands.
I would like to add to Chris' comments, Jeff, that I completely agree with everything you've said. To provide some context, we will be having another brand run as skate transitions, marking a fully branded product cycle in skate hard goods. Therefore, we will have runs in that area. While it may appear that penetration is decreasing, I don't anticipate a decline in revenue from private label. We expect to continue growing our business from a dollar perspective. Although we'll experience brand cycles, our strong owned brands will still allow us to grow in that segment. This will result in a shift in the mix in relation to the strength of the branded cycles.
It's a really good point because footwear is in that same bucket. Where in footwear, we just don't do private label. So we have a large chunk of our business that is going to be branded.
But Footwear has been kind of negative lately, correct?
No doubt. This has been our toughest category. Yes.
Okay. Let me ask whoever wants to answer this. Who do you think you're taking market share from in North America? Is it from the independents or somewhere else? Also, do you think the demographic you're targeting is changing or evolving? Are you attracting new customers with more private label offerings, possibly more on the women's side? I'd appreciate any thoughts you have on these ideas.
Yes, I'll start, and Chris can add on, Jeff. I mean, we are laser-focused on our core customer and that's the same core customer we've always been focused on, which is a young person, as Chris said a moment ago that wants to individuate and self-express their identity, they move through adolescent more so than their broader age demographic. So where we're, I think, benefiting is from this, and we may be drawing some people into that because of the faster nature of how I think how forward we are on trend. We may be trying some broader people. But I want to be clear, our focus is on our core consumer. And I think that's always a winning strategy as you think about how you serve your customers. You've got to start with your core consumer and hyper-serve them in this world. And that is our focus. And yes, maybe we are picking up in other areas, but it's because we're winning with, I think, what is one of the most influential consumers in the marketplace today, the person who's willing to lead on trend, that's our core consumer. And they may be bringing others along with them because of our ability to execute on behalf of that core consumer.
Okay. And then I'm sorry, on taking market share, any thoughts on who you might be taking some share from?
I don't have any significant thoughts on that. Most of our gains, as Chris mentioned, have come from executing on trend and partnering with our strong brand partners. While we've started to see some small transaction gains, the majority of our growth has been driven by average unit retail over the past couple of years. Now, we're beginning to win more transactions. It's important to recognize the reality of market volatility that we've discussed. Ultimately, our execution levels are likely allowing us to capture a larger share of consumer spending, and it's been the average unit retail over the last two years that has primarily contributed to our gains.
Now in the November period that you just finished, I think the transactions, I believe you said were down slightly. I'm just curious, what did you see in store traffic during this latest period?
Yes, I'd have to break it into two different regions because on a consolidated basis, we were down slightly. We were up in North America, and we were down slightly in Europe. Even though Europe ran a comp, again, more AUR, DPT driven than transactions. So we did see a transaction gain in North America. And I think what we saw traffic-wise was decent comps actually throughout the month with week four being by far our strongest though. We saw, I think, a really good pickup similar to how we saw Q3 where we saw back-to-school be really strong. And then it actually stayed more stable than we anticipated through the back two months of Q3. We saw the same thing in November, where it's stable and good comps, weeks one through three, but week four, definitely more impressive.
In the long run, Jeff, as consumer incomes begin to align with the current inflation rates, we are starting to see progress. We experienced comparable gains in North America during November, especially in back-to-school sales, as Chris mentioned. I believe that as incomes rise, we will begin to capture transaction rates effectively. Victor, do we have any additional questions from the group?
I'm not sure if Victor dropped. This is Jill. Jeff, I see you have a follow up?
I see Jeff Van Sinderen is still on stage.
My questions were answered.
And I'm not showing any further questions in the queue at this moment. I'd like to turn the call back over to Rick for any closing remarks.
Thank you, Victor. I want to extend my best wishes to everyone who supports what we're doing here at Zumiez and wish you all a very happy holiday season. Thank you very much.
Thank you for your participation in today's conference. This does conclude the program. You may now disconnect. Everyone, have a great day.