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Zumiez sees significant increase in promotional activity during Q4
18
Mar '09
Zumiez Inc reported results for the fourth quarter and fiscal year ended January 31, 2009.

Total net sales for the fourth quarter (13 weeks) ended January 31, 2009 decreased 0.9% to $125.5 million from $126.6 million reported in the fourth quarter ended February 2, 2008 (13 weeks). The company posted net income for the quarter of $6.3 million or $0.21 per diluted share, including a non-cash, after-tax charge of $0.02 per diluted share associated with the impairment of store related assets, offset by a lower tax rate worth $0.02 per diluted share.

Last year, Zumiez reported net income of $12.4 million or $0.42 per diluted share. Comparable store sales decreased 13.4% for the fourth quarter of fiscal 2008 compared to a 4.0% increase in the fourth quarter of fiscal 2007.

Total net sales for fiscal 2008 (52 week period) increased 7.1% to $408.7 million from $381.4 million reported in fiscal 2007 (52 week period). The company posted net income of $17.2 million or $0.58 per diluted share versus $25.3 million or $0.86 per diluted share in the prior year. Comparable store sales decreased 6.5% in fiscal 2008 compared to an increase of 9.2% in fiscal 2007.

Rick Brooks, Chief Executive Officer of Zumiez Inc., stated: "Fiscal 2008, particularly the second half of the year, was incredibly challenging. Since September the deteriorating economic conditions have significantly dampened consumer appetite for discretionary items. As a result, we saw a significant increase in promotional activity across all of retail, especially during the third and fourth quarters.

We reacted in quick fashion and were able to manage our business in such a way to remain profitable for all four quarters of fiscal 2008. In light of the unprecedented environment, our team did an exceptional job controlling expenses, managing inventory, and most importantly, preserving the unique Zumiez concept.

We begin 2009 confident that our strong balance sheet which includes approximately $79 million in cash, cash equivalents and current marketable securities, no debt and lean inventory levels, combined with our competitive advantages will allow us to successfully manage our business through this difficult macro environment. While longer-term we believe we are well positioned to drive increased profitability and greater shareholder value once the economy improves."

2009 Outlook
It has always been our goal to openly communicate actual results as well as our forward looking guidance with investors and other constituencies. In this spirit we plan to give guidance for the quarter we are currently operating in. However, due to the current market conditions and uncertain consumer environment, particularly in the back half of the year, the Company is discontinuing the practice of providing specific annual guidance until conditions normalize and visibility improves. Our current intention is to open approximately 37 new storesin fiscal 2009 with an opening cadence similar to fiscal 2008.

The Company is introducing guidance for the three months ending May 2, 2009 of a net loss of approximately ($0.17) to ($0.13) per diluted share. This guidance is based on an anticipated comparable store sales decline in the mid to high teen range for the first quarter of fiscal 2009.

Zumiez Inc


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