Zumiez Inc. ZUMZ reported a loss per share for the first quarter of fiscal 2022. Additionally, both metrics compare unfavorably to respective numbers reported the prior year. Results were hurt by numerous headwinds, including global supply chain issues, inflation, higher logistics costs and a tight labor market.
Over the past six months, shares of this currently ranked No. 4 player (selling) Zacks are down 25.6% compared to the industry’s 31% decline.
Results in detail
Zumiez posted a quarterly loss of 2 cents per share. Zacks consensus estimate was 7 cents. Net income also came against earnings of $1.03 per share recorded in the year-ago quarter.
Zumiez Inc. Price, Consensus and EPS Surprise
Zumiez Inc. price-consensus-eps-surprise-chart | Submission by Zumiez Inc.
Although total net sales of $220.7 million topped Zacks’ consensus estimate of $218 million, they were down 20.9% from the prior year period. This year-over-year decline is attributable to gains from the US stimulus achieved in early 2021 and mild inflationary pressures. These were somewhat offset by higher sales in each of the international geographies.
From a regional perspective, net sales in North America were $186.3 million, down 25.1% year-over-year. Other international sales, including Europe and Australia, were $34.4 million, up 13% year-over-year. Excluding the impact of foreign currency translations, North America net sales fell 25% and other international net sales increased 21.8% from the respective FY2021 readings.
Gross profit fell 29.8% year over year to $72.4 million. Gross margin decreased by 420 basis points (bps) to 32.8%. The year-over-year decline in gross margin was primarily due to lower sales as well as higher expenses, including higher logistics and labor costs.
SG&A expenses jumped 4.4% year over year to $71.9 million in the quarter under review. As a percentage of sales, general and administrative expenses increased 790 basis points year over year to 24.7%.
Zumiez reported operating profit of $0.5 million, down from $34.3 million in the prior quarter. The operating margin was 0.2%, down sharply from 12.3% a year ago.
Financial and other updates
As of April 30, 2022, ZUMZ had cash and current marketable securities of $173 million, compared to $400.4 million as of May 1, 2021. The decrease was due to capital expenditures and share buybacks, partially offset by cash provided by operations.
Total equity at the end of the quarter was $376.9 million. Zumiez had no debt at the end of the first fiscal quarter and maintained fully unused credit facilities. ZUMZ ended the fiscal year with inventory of $141.9 million, up 4% year-over-year.
Zumiez repurchased 1.9 million shares for $83.3 million during the first quarter of 2022. ZUMZ currently has no open repurchase authorizations.
As of May 28, 2022, Zumiez operated 741 stores, including 601 in the United States, 52 in Canada, 69 in Europe and 19 in Australia.
Net sales for the four weeks ended May 28, 2022 fell 20.9% year over year, but were down 3.3% from the level for the four weeks ended May 28, 2022. June 1, 2019.
From a regional perspective, net sales for the North America business fell 23.5% year-over-year during the aforementioned period, while the measure for the other international business fell by 0.3% compared to the level of last year and increased by 55.4% compared to the level of the same period in 2019. All categories showed a decrease in total sales compared to the level of the period of the previous year. Men remained the most negative category, followed by durable goods, accessories, women and footwear.
For the second fiscal quarter, net sales are projected in the range of $232 million to $239 million. Consolidated operating margins are expected to be between 5% and 6.5% with earnings per share of 45 to 55 cents.
For fiscal 2022, total sales will decline to high numbers from fiscal 2021. Earnings per share are expected to be between $3.55 and $3.80, indicating a decline from 4, $85 delivered in fiscal year 2021. Capital expenditures are expected to be between $30 million and $32 million for fiscal year 2022.
In fiscal 2022, management expects to open approximately 34 stores, including nearly 15 stores in North America, 14 stores in Europe and 5 stores in Australia.
Actions to consider
We have highlighted three top-ranked stocks in the Retail – Wholesale sector, namely Tecnoglass TGLS, Operation of the starter barn BOOT and Attached QUICK.
Tecnoglass engages in the manufacture and sale of architectural glass and window and aluminum products for the residential and commercial construction industries. It currently sports a Zacks rank #1 (Strong Buy). Shares of TGLS have jumped 12.9% over the past year.
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Zacks’ consensus estimate for Tecnoglass’ sales and earnings per share for the current fiscal year suggests growth of 21.3% and 28.7%, respectively, from figures released a year ago. TGLS has a last four quarter earnings surprise of 28.3% on average.
Boot Barn, a lifestyle chain of Western and work-related footwear, apparel and accessories, currently has a Zacks No. 1 ranking. The company has a four-quarter earnings surprise of 25.2% on average. BOOT shares are up 19.8% over the past year.
Zacks’ consensus estimate for Boot Barn’s sales and earnings per share for the current fiscal year suggests growth of 17% and 4.4%, respectively, from numbers reported a year ago. BOOT has an expected EPS growth rate of 20% over three to five years.
Fastenal, a national wholesale distributor of industrial and construction supplies, currently has a Zacks rank of No. 2 (buy). The company has an earnings surprise for the last four quarters of 5% on average. FAST shares are up 0.6% over the past year.
Zacks’ consensus estimate for Fastenal’s sales and earnings per share for the current fiscal year suggests growth of 15.4% and 16.3%, respectively, over the prior year period. FAST forecasts an EPS growth rate of 9% over three to five years.
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Zumiez Inc. (ZUMZ): Free Stock Analysis Report
Fastenal Company (FAST): Free Stock Analysis Report
Boot Barn Holdings, Inc. (BOOT): Free Stock Analysis Report
Tecnoglass Inc. (TGLS): Free Stock Analysis Report
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