Sports apparel retailer Zumiez, Inc. (ZUMZ) reported Thursday a profit for the first quarter that declined from last year, reflecting lower margins amid increase in expenses. Stripping down charges, earnings per share would have topped analysts' expectations by a penny, so did quarterly revenues.
The company also provided adjusted earnings and revenue guidance for the second quarter, both in line with Street view.
"Our business improved throughout the first quarter driven by strong full price selling during the combined March/April period," CEO Rick Brooks said in a statement.
Everett, Washington-based Zumiez reported net income of $2.50 million or $0.08 per share for the first quarter, lower than $4.53 million or $0.14 per share in the prior-year quarter.
Results for the latest quarter include $0.05 per share of charges associated with the acquisition of Blue Tomato, while the year-ago results included $0.01 per share of the same charges. Excluding the charges, adjusted net income for the latest quarter would have been $0.13 per share.
On average, 20 analysts polled by Thomson Reuters expected earnings of $0.12 per share for the quarter. Analysts' estimates typically exclude special items.
Total net sales for the quarter increased 14.3 percent to $148.50 million from $129.90 million in the same quarter last year, and topped Wall Street analysts' consensus estimate of $147.66 million by a whisker.
Comparable store sales, or sales from stores open at least a year, for the quarter edged down 0.7 percent on top of a 12.9 percent increase last year.
Operating margin for the quarter contracted 290 basis points to 2.7 percent from last year's 5.6 percent, as gross margin dropped 10 basis points and selling, general and administrative expenses, as a percentage of total sales, increased 280 basis points.
Looking ahead to the second quarter, the company said it expects earnings in a range of $0.12 to $0.14 per share, on projected net sales of between $155 million and $158 million, with comparable store sales in the range of flat to an increase of 2 percent.
Excluding an estimated $0.04 per share of charges associated with the acquisition of Blue Tomato, adjusted earnings would be expected in a range of $0.16 to $0.18 per share.
Street is currently looking for earnings of $0.17 per share on revenue of $156.79 million for the second quarter.
The company also revealed that it currently intends to open 58 new stores in fiscal 2013, including 9 stores in Canada and 6 stores in Europe.
"These results, which were delivered in a more challenging operating environment than a year ago, reflect the success of our continued execution on long-term growth strategies and the strength of our highly differentiated and diverse merchandise offering. We remain confident that our current course can continue to yield increased top and bottom line long-term gains," Brooks added.
ZUMZ closed Thursday's regular trading session at $32.00, down $0.19 or 0.59% on a volume of 0.75 million shares. The stock slipped a further $0.99 or 3.09% in after-hours trading.
by RTT Staff Writer
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