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2022-03-12 11:36

Zumiez Inc. stock closed about 10% down on Friday after the company reported its financial results for the fiscal fourth quarter and full year 2021. Zumiez is a prominent specialist store of young men's and women's clothes, footwear, equipment, and accessories.
Highlights from Zumiez earnings report

Net sales grew 4.6% to $346.7 million in the fourth quarter of fiscal 2021, up from $331.5 million in the fourth quarter of fiscal 2020. Total net sales for fiscal 2021, which concluded on January 29, 2022, grew 19.5% to $1,183.9 million, up from $990.7 million recorded for fiscal 2020, which ended January 30, 2021. Net income for fiscal 2021 was $119.3 million, or $4.85 per diluted share, compared to $76.2 million, or $3.00 per diluted share, in fiscal 2020, and $66.9 million, or $2.62 per diluted share, in fiscal 2019.

The Company had $294.5 million in cash and current marketable securities on January 29, 2022, down from $375.5 million on January 30, 2021. Share repurchases and capital expenditures drove the reduction in cash and current marketable securities, which was largely offset by cash earned via operations. During fiscal year 2021, the Company bought back 4.6 million shares at an average price of $43.30 per share for a total cost of $198.4 million.

Rick Brooks, Chief Executive Officer of Zumiez said:

“Fiscal 2021 was a year of tremendous growth and record profitability for Zumiez. Our multi-year success is directly attributable to the execution of the long-term consumer centric growth strategy the Company has been building and evolving since its inception.”

Zumiez outlook for the future

As we observed a positive influence of stimulus on net sales in the first quarter of fiscal 2021 and the present economic uncertainties, the Company expects net sales to be around $215 million and $221 million in the first quarter of fiscal 2022 which is a significant decrease from the prior year. Due to the decrease in sales, the Company expects deleverage in the income statement from both fixed costs and the reintroduction of expenses that were omitted in 2021 due to the COVID-19 outbreak, such as store salaries, training, and travel.

For the quarter, earnings per diluted share are predicted to range from break-even to positive $0.10.Moreover, in fiscal 2022, the Company plans to establish roughly 34 additional shops, comprising up to 15 stores in North America, 14 stores in Europe, and 5 stores in Australia.

Including the price action on Friday, the stock that currently trades at a price to earnings ratio of 8.22 is down roughly 20% for the year and over 30% from its high in late November 2021.