Zumiez Inc
For the period ended May 3, 2025. Filed Jun 5, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
May 3, 2025 · Filed Jun 5, 2025
ZUMZ$14.04-3.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-11-02; filed 2024-12-05.
0000950170-24-133660
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-05-03; filed 2025-06-05.
0000950170-25-082292
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 141 previous paragraphs and 135 current paragraphs.
113 unchanged; 16 reworded; 6 added; 10 removed; 2 previous and 0 current paragraphs rearranged.
Tables are not compared: 1 previous and 1 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (6)
Current report
Item 2: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Current report
On December 20, 2024, we entered into a credit agreement with PNC Bank, National Association (the “bank”). The Credit Agreement provides for a revolving credit facility of up to $25 million (the “credit facility”) and is available for general corporate purpose. This Credit Facility also provides for the issuances of standby letters of credit in an amount not to exceed $17.5 million, commercial letters of credit in an amount not to exceed $10 million and borrowings in foreign currency with a borrowing sublimit not to exceed $15 million in equivalent U.S. dollars. The amount of borrowing available at any time under the Credit Facility is reduced by the amount of standby and commercial letters of credit outstanding at that time. This credit facility replaced our previously maintained agreement with Wells Fargo Bank, N.A. which we terminated on May 3, 2024.
Current report
The new Credit Facility is secured by cash and marketable securities that are in an account held and monitored by the Bank. The value of this collateral must always be greater than or equal to the new Credit Facility commitment amount of $25 million. Amounts borrowed under the new Credit Facility bear interest at the rate of SOFR plus 1.00% per annum. The Credit Agreement does not provide for any financial covenants but does include standard and customary covenants consistent with credit facilities of this nature.
Current report
The new Credit Facility does not carry any ongoing or unused balance fees. The Credit Facility will mature on December 20, 2025.
Current report
Most of our merchandise is imported and is subject to duties, indirect taxes, quotas and non-tariff trade barriers, any of which may limit the quantity of products that we may import into the U.S. and other countries or may impact the cost of such products. The current U.S. presidential administration has implemented tariffs and has signaled that it may implement additional or increased tariffs, other trade restrictions, or may alter trade agreements between the U.S. and Canada, China, the European Union and Mexico, among others. Such actions include limiting trade and/or imposing tariffs on imports from such countries. Tariffs have the potential to significantly raise the cost of our merchandise. In such a case, there can be no assurance that we will be able to shift manufacturing and supply agreements to non-impacted countries to reduce the effects of tariffs. As a result, we may suffer margin erosion or be required to raise our prices, which may result in the loss of customers, negatively impact our results of operations, or otherwise harm our business.
Current report
Globally, a lack of harmonization and the rapid evolution in relation to ESG legal and regulatory reform across the jurisdictions in which we may operate may affect our future implementation of, and compliance with, ESG standards and requirements. Standards for tracking and reporting ESG matters are relatively new, have not been formalized and continue to evolve. Collecting, measuring, and reporting ESG information and metrics can be difficult and time consuming. In addition, our processes and controls may not comply with evolving standards for identifying, measuring and reporting ESG metrics, including ESG-related disclosures that may be required of public companies by the SEC and other regulators, and such standards may change over time, which could result in significant revisions to our current goals, reported progress in achieving such goals, or ability to achieve such goals in the future, and could cause us to undertake costly initiatives to satisfy such new criteria.
Removed paragraphs (10)
Previous report
Net sales were $222.5 million for the three months ended November 2, 2024 compared to $216.3 million for the three months ended October 28, 2023, an increase of $6.2 million or 2.9%. The increase in sales was primarily driven by comparable sales increase in North America and is partially offset by a 5.1% decrease due to the retail calendar shift which moved one higher volume back-to-school week out of the third quarter and into the second quarter. By region, North America sales increased $5.2 million or 2.9% and other international sales (which consists of Europe and Australia sales) increased $0.9 million or 2.7% and for the three months ended November 2, 2024 compared to the three months ended October 28, 2023. Excluding the impact of changes in foreign exchange rates, North America sales increased $5.3 million or 2.9% and other international sales decreased $0.1 million or -0.3% for the three months ended November 2, 2024 compared to the three months ended October 28, 2023.
Previous report
Gross profit was $78.3 million for the three months ended November 2, 2024 compared to $73.2 million for the three months ended October 28, 2023, an increase of $5.1 million, or 7.0%. As a percent of net sales, gross profit increased 140 basis points for the three months ended November 2, 2024 to 35.2%. The increase was primarily driven by 70 basis point improvement in product margin (defined as net sales minus cost of goods sold excluding shrinkage, buying, occupancy, distribution and warehousing costs and freight costs for store merchandise transfers), 60 basis point leverage in store occupancy cost, 60 basis point benefit in web shipping costs, partially offset by 30 basis point detriment in inventory shrinkage and 10 basis point detriment due to increase in annual incentive compensation.
Previous report
Net Income (Loss)
Previous report
Nine Months (39 weeks) Ended November 2, 2024 Compared With Nine Months (39 weeks) Ended October 28, 2023
Previous report
Net Sales
Previous report
Gross Profit
Previous report
Selling, General and Administrative Expenses
Previous report
Selling, general and administrative (“SG&A”) expenses were $220.2 million for the nine months ended November 2, 2024, compared to $216.2 million for the nine months ended October 28, 2023, an increase of $4.0 million, or 1.8%. SG&A expenses as a percent of net sales decreased 30 basis points for the nine months ended November 2, 2024, to 36.0%. The decrease was primarily driven by 30 basis point decrease in corporate costs, 30 basis point decrease in store wages tied to a reduction of store hours, 20 basis points due to store costs not tied to wages, partially offset by 50 basis point increase in annual incentive compensation.
Previous report
Additionally, we previously maintained a secured credit agreement with Wells Fargo Bank, N.A., which provided us with a senior secured credit facility (“credit facility”) of up to $25.0 million through December 1, 2024. The credit facility was available for working capital and other general corporate purposes and provided for the issuance of standby and commercial letters of credit. The credit facility was secured by a first-priority security interest in substantially all personal property (but not the real property) of the borrowers and guarantors. The credit agreement was cancelled on May 3, 2024. Outstanding line of credits were transitioned to a cash backed status using restricted cash accounts. We expect to enter into a new credit facility with similar borrowing capacities with a new lender during the fourth quarter of fiscal 2024.
Previous report
Trade restrictions such as increased tariffs or quotas, or both, could also increase the cost and reduce the supply of merchandise available to us. Any reduction in merchandise available to us or any increase in its cost due to tariffs, quotas or local issues that disrupt trade could have a material adverse effect on our results of operations. Additionally, the effects of U.S.-China relations, including escalating U.S.-China tensions and potential tariff increases, retaliations, restrictive regulations or boycotts could have a material adverse effect on our results of operations. This includes costs to comply with regulatory developments regarding the use of “conflict minerals,” certain minerals originating from the Democratic Republic of Congo and adjoining countries, which may affect the sourcing and availability of raw materials used by manufacturers and subject us to increased costs associated with our products, processes or sources of our inputs. Our business could be adversely affected by disruptions in the supply chain, such as strikes, work stoppages, or port closures.
Reworded paragraphs (16)
Previous wording
Fiscal 2024 is the 52-week period ending February 1, 2025. Fiscal 2023 was the 53-week period ending February 3, 2024. The first nine months of fiscal 2024 was the 39-week period ended November 2, 2024. The first nine months of fiscal 2023 was the 39-week period ended October 28, 2023.
Current wording
Fiscal 2025 is the 52-week period ending January 31, 2026. Fiscal 2024 was the 52-week period ending February 1, 2025. The first three months of fiscal 2025 was the 13-week period ended May 3, 2025. The first three months of fiscal 2024 was the 13-week period ended May 4, 2024.
Previous wording
We have been, and we expect to continue to be affected by a number of factors that may cause actual results to differ from our historical results or current expectations. These factors include the impact of foreign currency rates; changes in laws, including U.S. tax law changes; fluctuations in variable costs, and changes in general economic conditions in the markets in which we operate. Additionally, we have experienced increased costs during 2023 and 2024. Our ability to raise our selling prices depends on market conditions and there may be periods during which we are unable to fully recover increases in our costs or experience an adverse impact on demand due to pricing actions. We believe higher consumer price inflation has resulted in reduced consumer confidence and consumer spending which negatively impacted our sales during fiscal 2023 and the first nine months of fiscal 2024.
Current wording
We have been, and we expect to continue to be affected by a number of factors that may cause actual results to differ from our historical results or current expectations. These factors include the impact of foreign currency rates; changes in laws, including U.S. tax law changes; fluctuations in variable costs, and changes in general economic conditions in the markets in which we operate. Additionally, we have experienced increased costs during 2024 and 2025. Our ability to raise our selling prices depends on market conditions and there may be periods during which we are unable to fully recover increases in our costs or experience an adverse impact on demand due to pricing actions. We believe higher consumer price inflation has resulted in reduced consumer confidence and consumer spending which negatively impacted our sales during fiscal 2024 and the first three months of fiscal 2025.
Previous wording
Net sales were $610.0 million for the nine months ended November 2, 2024, compared to $593.7 million for the nine months ended October 28, 2023, an increase of $16.4 million or 2.8%. The increase in sales was primarily driven by comparable sales increases in North America, partially offset by an unfavorable result in Europe. By region, North America sales increased $20.6 million or 4.2% and other international sales (which consists of Europe and Australia sales) decreased $4.2 million or 3.9% and for the nine months ended November 2, 2024, compared to the nine months ended October 28, 2023. Excluding the impact of changes in foreign exchange rates, North America sales increased $21.0 million or 4.3% and other international sales decreased $4.8 million or 4.4% for the nine months ended November 2, 2024 compared to the nine months ended October 28, 2023.
Current wording
Net sales were $184.3 million for the three months ended May 3, 2025 compared to $177.4 million for the three months ended May 4, 2024, an increase of $6.9 million or 3.9%. The increase in sales was primarily driven by $10.2 million comparable sales increase in North America, partially offset by net closure of 21 stores subsequent to May 4, 2024. By region, North America sales increased $7.0 million or 4.9% and other international sales (which consists of Europe and Australia sales) decreased $0.1 million or 0.2% for the three months ended May 3, 2025 compared to the three months ended May 4, 2024. Excluding the impact of changes in foreign exchange rates, North America sales increased $7.5 million or 5.2% and other international sales were not significantly impacted by foreign exchange rates for the three months ended May 3, 2025 compared to the three months ended May 4, 2024. decreased $- million or 0.1%
Previous wording
Comparable sales increased 7.5% for the three months ended November 2, 2024 driven by an increase in dollars per transaction and an increase in transactions. Dollars per transaction increased due to an increase in both average unit retail and units per transaction. By category, net sales were primarily driven by increases in men's clothing, women's clothing, and footwear, partially offset by decreases in accessories and hardgoods.
Current wording
Comparable sales increased 5.5% for the three months ended May 3, 2025 driven by an increase in dollars per transaction partially offset by a decrease in transactions. Dollars per transaction increased due to an increase in both average unit retail and units per transaction. By category, net sales were primarily driven by increases in women's clothing, men's clothing, footwear and accessories, partially offset by decrease in hardgoods.
Previous wording
Gross profit was $202.0 million for the nine months ended November 2, 2024, compared to $184.2 million for the nine months ended October 28, 2023, an increase of $17.8 million, or 9.6%. As a percent of net sales, gross profit increased 210 basis points for the nine months ended November 2, 2024, to 33.1%. The increase was primarily driven by a 110 basis point benefit in web shipping costs, 70 basis point leverage in store occupancy cost, and a 30 basis point benefit in distribution center costs.
Current wording
Gross profit was $55.3 million for the three months ended May 3, 2025 compared to $51.9 million for the three months ended May 4, 2024, an increase of $3.4 million, or 6.6%. As a percent of net sales, gross profit increased 70 basis points for the three months ended May 3, 2025 to 30.0%. The increase was primarily driven by 70 basis points of leverage in store occupancy cost.
Previous wording
Selling, general and administrative (“SG&A”) expense was $75.9 million for the three months ended November 2, 2024 compared to $73.4 million for the three months ended October 28, 2023, an increase of $2.6 million. SG&A expenses as a percent of net sales increased 20 basis points for the three months ended November 2, 2024 to 34.1%. The increase was primarily driven by 50 basis point increase in annual incentive compensation, 20 basis points deleverage in store costs not tied to wages, partially offset by 40 basis points due a reduction in employee training.
Current wording
Selling, general and administrative (“SG&A”) expense was $75.2 million for the three months ended May 3, 2025 compared to $72.1 million for the three months ended May 4, 2024, an increase of $3.1 million. SG&A expenses as a percent of net sales increased 20 basis points for the three months ended May 3, 2025 to 40.8%. The increase was primarily driven by a 160 basis point increase due to a $2.9 million litigation settlement, offset by a 70 basis point leverage in store costs not tied to wages, 30 basis point decrease in corporate costs, and 40 basis point leverage in various smaller benefits related to annual incentive compensation, wages and training.
Previous wording
Net loss for the nine months ended November 2, 2024, was $16.5 million, or $0.86 loss per diluted share, compared with net loss of $29.1 million, or $1.51 loss per diluted share, for the nine months ended October 28, 2023. Our effective income tax rate for the nine months ended November 2, 2024, was a 3.7% provision for income taxes compared to an 4.8% benefit from income taxes for the nine months ended October 28, 2023. The decrease in effective income tax rate was primarily due to the allocation of losses across the jurisdictions that we operate.
Current wording
Net loss for the three months ended May 3, 2025 was $14.3 million, or $0.79 loss per diluted share, compared with net loss of $16.8 million, or $0.86 loss per diluted share, for the three months ended May 4, 2024. Our effective income tax rate for the three months ended May 3, 2025 was a 9.1% benefit from income taxes compared to a 14.4% benefit from income taxes for the three months ended May 4, 2024. The decrease in effective income tax rate was primarily due to the allocation of losses across the jurisdictions that we operate.
Previous wording
During fiscal 2024, we expect to spend approximately $14.0 million to $16.0 million on capital expenditures, a majority of which will relate to leasehold improvements and fixtures for the approximately 1 new stores we remain on track to open in fiscal 2024 and remodels or relocations of existing stores. There can be no assurance that the number of stores that we actually open in fiscal 2024 will not be different from the number of stores we plan to open, or that actual fiscal 2024 capital expenditures will not differ from our expectations.
Current wording
During fiscal 2025, we expect to spend approximately $14.0 million to $16.0 million on capital expenditures, a majority of which will relate to leasehold improvements and fixtures for the approximately 9 new stores we that we are planning to open in fiscal 2025 and remodels or relocations of existing stores. There can be no assurance that the number of stores that we actually open in fiscal 2025 will not be different from the number of stores we plan to open, or that actual fiscal 2025 capital expenditures will not differ from our expectations.
Previous wording
Net cash used in operating activities increased by $11.1 million to $34.0 million used in operating activities for the nine months ended November 2, 2024 from $22.9 million used in operating activities for the nine months ended October 28, 2023. Net cash used in operating activities was $34.0 million for the nine months ended November 2, 2024 related to $89.2 million in unfavorable changes in our operating assets and liabilities and a $16.5 million net loss, excluding $71.6 million of noncash charges included within net earnings for the period. Net cash used in operating activities was $22.9 million for the nine months ended October 28, 2023 related to $65.6 million in unfavorable changes in our operating assets and liabilities and a $29.1 million net loss, excluding $71.8 million of noncash charges included within net loss for the period. Our operating cash flows generally result primarily from cash received from our customers, offset by cash payments we make for inventory, employee compensation, store occupancy expenses and other operational expenditures. Cash received from our customers generally corresponds to our net sales. Because our customers primarily use credit cards or cash to buy from us, our receivables from customers settle quickly. Historically, changes to our operating cash flows have been driven primarily by changes in operating income, which is impacted by changes to non-cash items such as depreciation, amortization and accretion, deferred taxes, and changes to the components of working capital.
Current wording
Net cash used in operating activities increased by $3.5 million to $22.1 million used in operating activities for the three months ended May 3, 2025 from $18.6 million used in operating activities for the three months ended May 4, 2024. Net cash used in operating activities was $22.1 million for the three months ended May 3, 2025 related to $27.8 million in unfavorable changes in our operating assets and liabilities and a $14.3 million net loss, excluding $20.0 million of noncash charges included within net loss for the period. Net cash used in operating activities was $18.6 million for the three months ended May 4, 2024 related to $21.6 million in unfavorable changes in our operating assets and liabilities and a $16.8 million net loss, excluding $19.8 million of noncash charges included within net loss for the period. Our operating cash flows primarily result from cash received from our customers, offset by cash payments we make for inventory, employee compensation, store occupancy expenses and other operational expenditures. Cash received from our customers generally corresponds to our net sales. Because our customers primarily use credit cards or cash to buy from us, our receivables from customers settle quickly. Historically, changes to our operating cash flows have been driven primarily by changes in operating income, which is impacted by changes to non-cash items such as depreciation, amortization and accretion, deferred taxes, and changes to the components of working capital.
Previous wording
Net cash provided by investing activities was $22.1 million for the nine months ended November 2, 2024 related to $32.1 million in net sales of marketable securities, partially offset $10.0 million of capital expenditures primarily for new store openings and existing store remodels or relocations. Net cash used in investing activities was $10.4 million for the nine months ended October 28, 2023, related to $16.2 million of capital expenditures primarily for new store openings and existing store remodels or relocation, partially offset by $5.9 million in net sales of marketable securities.
Current wording
Net cash used in investing activities was $4.2 million for the three months ended May 3, 2025 related to $2.0 million in net purchases of marketable securities, and $2.2 million of capital expenditures primarily for new store openings, and relocations. Net cash provided by investing activities was $8.0 million for the three months ended May 4, 2024, related to $10.5 million in net sales of marketable securities, partially offset by $2.5 million of capital expenditures primarily for new store openings, existing store remodels or relocation.
Previous wording
Net cash used in financing activities for the nine months ended November 2, 2024 was $24.6 million, related$25.2 million used in the repurchase of common stock and $0.1 million in payments for tax withholding obligations upon vesting of restricted stock partially offset by $0.7 million in proceeds from the issuance and exercise of stock-based awards. Net cash provided by financing activities for the nine months ended October 28, 2023 was $0.7 million, related to $0.9 million in proceeds from the issuance and exercise of stock-based awards, partially offset by $0.2 million in payments for tax withholding obligations upon vesting of restricted stock.
Current wording
Net cash used in financing activities for the three months ended May 3, 2025 was $25.0 million, related$25.2 million used in the repurchase of common stock and $0.2 million in payments for tax withholding obligations upon vesting of restricted stock partially offset by $0.4 million in proceeds from the issuance and exercise of stock-based awards. Net cash provided by financing activities for the three months ended May 4, 2024 was $0.2 million, related to $0.3 million in proceeds from the issuance and exercise of stock-based awards, partially offset by $0.1 million in payments for tax withholding obligations upon vesting of restricted stock.
Previous wording
There were no borrowings or open commercial letters of credit outstanding under the secured credit facility at February 3, 2024. We had no open commercial letters of credit outstanding at November 2, 2024 nor outstanding as of February 3, 2024. We had $2.7 million in issued, but undrawn, standby letters of credit at November 2, 2024 and $3.4 million in issued, but undrawn, standby letters of credit at February 3, 2024 As of November 2, 2024, the open standby letters of credit are backed by restricted cash deposits at the bank.
Current wording
There were no borrowings or open commercial letters of credit outstanding under the secured credit facility at May 3, 2025 or February 1, 2025. We had $2.7 million in issued, but undrawn, standby letters of credit at February 1, 2025. As of May 3, 2025, we have $4.2 million in issued, but undrawn, standby letters of credit backed by restricted cash deposits and marketable securities at the bank.
Previous wording
Our retail market historically has been subject to substantial cyclicality. As the U.S. and global economic and political conditions change, the trends in discretionary consumer spending become unpredictable and discretionary consumer spending could be reduced due to uncertainties about the future. Economic and consumer confidence can also be affected by a variety of factors, including housing prices, unemployment rates and inflation. When disposable income decreases or discretionary consumer spending is reduced due to a decline in consumer confidence, purchases of apparel and related products may decline. A deterioration in macroeconomic conditions or consumer confidence or uncertainty in the U.S. and global economies and political environment could have a material adverse impact on our results of operations and financial position. In addition, government shutdowns or the risk of government shutdowns as well as the impact or expected impact of elections, both in the U.S. and in other markets where we operate could have a material adverse impact on our results of operations and financial position.
Current wording
Our retail market historically has been subject to substantial cyclicality. As the U.S. and global economic and political conditions change, the trends in discretionary consumer spending become unpredictable and discretionary consumer spending could be reduced due to uncertainties about the future. This includes rising geopolitical tensions and U.S. policies related to global trade and tariffs. The deterioration of economic relations between countries, such as changes in or terminations of existing trade agreements, or the imposition of tariffs (including recent U.S. tariffs imposed or threatened to be imposed on Canada, Mexico, and other countries, and any retaliatory actions taken by such countries) or otherwise, could impact our profitability or otherwise have an adverse effect on our business. Economic and consumer confidence can also be affected by a variety of factors, including housing prices, unemployment rates and inflation. When disposable income decreases or discretionary consumer spending is reduced due to a decline in consumer confidence, purchases of apparel and related products may decline. A deterioration in macroeconomic conditions or consumer confidence or uncertainty in the U.S. and global economies and political environment could have a material adverse impact on our results of operations and financial position. In addition, government shutdowns or the risk of government shutdowns as well as the impact or expected impact of elections, both in the U.S. and in other markets where we operate could have a material adverse impact on our results of operations and financial position.
Previous wording
Most of our merchandise is produced by foreign manufacturers; therefore, the availability, quality and costs of our merchandise may be negatively affected by risks associated with international trade and other international conditions.
Current wording
Most of our merchandise is produced by foreign manufacturers; therefore, the availability, quality and costs of our merchandise may be negatively affected by risks associated with international trade and other international conditions, including the implementation of increased tariffs or other restrictions placed on foreign imports.
Previous wording
Most of our merchandise is produced by manufacturers around the world, including China. Some of these facilities are located in regions that may be affected by natural disasters, public health concerns, or emergencies, such as COVID-19 and other communicable diseases or viruses, political instability or other conditions that could cause a disruption in trade.
Current wording
Most of our merchandise is produced by manufacturers around the world, including China. Some of these facilities are located in regions that may be affected by natural disasters, public health concerns, or emergencies, such as COVID-19 and other communicable diseases or viruses, political instability or other conditions that could cause a disruption in trade. Also, our business could be adversely affected by disruptions in the supply chain, such as strikes, work stoppages, or port closures.
Previous wording
Increased scrutiny and changing expectations from stakeholders with respect to the Company’s ESG practices may result in additional costs or risks.
Current wording
Increased scrutiny and changing expectations from stakeholders with respect to ESG matters may result in additional costs or risks.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
Net income for the three months ended November 2, 2024 was $1.2 million, or $0.06 earnings per diluted share, compared with net loss of $2.2 million, or $0.12 loss per diluted share, for the three months ended October 28, 2023. Our effective income tax rate for the three months ended November 2, 2024 was a 63.4% provision for income taxes compared to an 806.8% provision for income taxes for the three months ended October 28, 2023. The decrease in effective income tax rate was primarily due to the allocation of losses across the jurisdictions that we operate.
Previous report — wording carried elsewhere
Comparable sales increased 3.2% for the nine months ended November 2, 2024, driven by an increase in dollars per transaction that was offset by a decrease in transactions. Dollars per transaction increased due to an increase in both average unit retail and units per transaction. By category, net sales were primarily driven by an increase in men's clothing, women's clothing, followed by footwear, partially offset by accessories and hardgoods.