EVERETT — Zumiez Inc. broke free of the retail slump that hit most stores late last year, exceeding sales predictions and enjoying a Friday boost on an otherwise negative day for the stock markets.
The Everett-based retailer, which sells action-sports gear and clothing, saw its profit rise 10 percent during the fourth quarter, which includes the important holiday sales period.
Zumiez’s net income grew to $12.4 million, or 42 cents a share, for the three months ended Feb. 2, compared to just less than $11.3 million in the same period a year ago.
The company’s overall sales totaled $126.6 million, up nearly 13 percent from $112.4 million reported in the year-ago quarter.
Most of that sales growth came from the 50 new stores Zumiez opened during 2007. Same-store sales, which counts revenue from locations open more than a year, grew a less impressive 4 percent.
“It’s no secret today’s retail environment is tough and the teen consumer is not immune to the current macro issues,” Richard Brooks, Zumiez’s chief executive officer, said in a conference call with analysts and investors.
Nonetheless, Zumiez isn’t planning to slow down its growth this year. After opening 50 stores last year, to give the retail chain 285 locations, it plans to open another 57 this year.
The company also forecasted earnings for 2008 will total somewhere between 90 cents and 93 cents per share, based on “a flat to low-single digit increase” in same-store sales as the economy slows.
That would still mean improvement from the previous year. For all of 2007, Zumiez produced earnings of $25 million, or 86 cents a share, up from $21 million in 2006. Sales for the past year soared 28 percent, from $298 million in 2006 to $381 million.
Thanks to the better-than-expected news, shares of Zumiez’s recently battered stock gained $1.14, or 8 percent, to close at $15.24. In recent weeks, the company’s shares have fallen on reports of weaker-than-hoped sales in January and February.
Brooks said the company doesn’t believe in significantly altering its formula for success in the face of a possible recession, however.
“In prior economic downturns, we’ve been able to acquire great talent and locations, and we believe this may occur again during the current cycle we’re operating under now,” he said. “In our opinion, the stronger disciplined, well-financed companies like Zumiez benefit longer term from these periods of retail shake-up.”
Reporter Eric Fetters: 425-339-3453 or fetters@heraldnet.com.
Talk to us
> Give us your news tips.
> Send us a letter to the editor.
> More Herald contact information.
