Zumiez Sees Continued Store Growth

EVERETT, WA-Action sports clothing and equipment retailer Zumiez Inc. plans to continue its plans for new stores, the company said Thursday in reporting record financial results for the third quarter ended Nov. 3 despite an economy that has been vexing many retailers. President and CEO Rick Brooks of Zumiez, which posted a 13.2% comparable store sales increase for the quarter, pointed out in the company’s earnings conference call that the chain “reached our goal of 50 new stores in fiscal 2007, and continue to believe that we can eventually operate 800 Zumiez stores in the US.”

Zumiez opened 17 new stores in the third quarter and opened 48 stores in the first three quarters, reaching its 50-store goal for the year by opening two new stores in November, after the close of the third quarter. Unlike the many retailers that have been citing economic conditions for disappointing results lately, Zumiez officials said they are confident about the future, although Brooks mentioned being “concerned about the macro economic environment.”

Zumiez plans to increase its total store square footage by about 20%, or approximately 55 new stores next year, according to remarks by Trevor Lang, chief financial officer of the company, during Thursday’s conference call. Lang said that the company does not yet have more specifics to report on plans and expectations for next year, but it will provide additional information on those topics in the company’s March 2008 conference call. He said that Zumiez plans to follow the same real estate strategy that it has pursued thus far, opening in possibly two new states next year along with adding stores in states where it is already operating.

Zumiez’ total net sales for the third quarter increased by 26.5% to $104 million, while its net income climbed to $8.1 million, compared with $6.8 million in the third quarter last year. On a per-share basis, income rose to 28 cents versus 24 cents last year. The 13.2% comp store sales increase in this year’s third quarter came on top of an increase of 10.7% in the third quarter of last year. The increase in total net sales reflected both the higher comps and the company’s opening of its 50 new stores this year.

Zumiez achieved its third-quarter results despite some significant one-time expenses and the loss of a week of sales that affected comps. Brooks said that although the firm doesn’t usually comment during the month on sales trends, November’s sales and comps have been in line with expectations, including comp store sales percentage increases in the mid-teens over the Thanksgiving weekend. Zumiez targets men and women between ages 12-24, focusing on skateboarding, surfing, snowboarding, motocross and BMX. It operates 283 stores, which are primarily located in shopping malls.