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Zumiez experiences improved sales trends

24
Aug '09
Zumiez Inc. reported results for the second quarter ended August 1, 2009.

Total net sales for the second quarter (13 weeks) ended August 1, 2009 decreased 7.7% to $85.2 million from $92.3 million reported in the second quarter ended August 2, 2008 (13 weeks). The company posted a net loss for the quarter of $3.1 million or ($0.10) per diluted share for the fiscal 2009 second quarter. These results include a charge of $1.3 million, or approximately $0.03 per diluted share, associated with the settlement agreement of a previously disclosed lawsuit. Net income in the second quarter of the prior fiscal year was $2.7 million or $0.09 per diluted share. Comparable store sales for the second fiscal quarter of 2009 decreased 18.8% vs. a decrease of 1.7% for the second quarter of 2008.

Total net sales for the first six months (26 weeks) ended August 1, 2009 decreased 5.3% to $162.0 million from $171.0 million reported in the first six months of the prior year. The company posted a net loss of $4.7 million or ($0.16) per diluted share in the first six months of fiscal 2009 compared to net income in the first six months of the prior fiscal year of $4.1 million or $0.14 per diluted share. Results for the first six months of fiscal 2009 include a charge of $1.3 million, or approximately $0.03 per diluted share, associated with the settlement agreement of a previously disclosed lawsuit. Comparable store sales decreased 17.2% in the first six months of fiscal 2009 vs. a decrease of 1.3% for the first six months of 2008.

Rick Brooks, Chief Executive Officer of Zumiez Inc., stated: "As the second quarter progressed, we experienced improved sales trends throughout the majority of our store base which allowed us to once again exceed our initial projections. We have worked diligently to provide the consumer with merchandise assortments that are both trend right and compellingly priced while at the same time maintain our product margins and protect the integrity of our brands. Despite the weak and volatile market conditions, we are encouraged with our ability to effectively manage our inventory and improve our cash position during a time when consumer discretionary spending is down. While comparisons do begin to moderate in the back half of the year, we believe it is prudent to remain cautious with regard to our near-term outlook until consumer trends stabilize and visibility improves. That said, we are optimistic about our future growth prospects and the long-term potential of our business."

Outlook
The Company is introducing guidance for the three months ending October 31, 2009 of net income of approximately $0.05 to $0.07 per diluted share. This guidance is based on an anticipated comparable store sales decline in the mid-to-low teen range for the third quarter of fiscal 2009.

We intend to open approximately 36 new stores in fiscal 2009 with an opening cadence similar to fiscal 2008.

Zumiez Inc


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