Zumiez Inc

Previous 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 nine months of fiscal 2025 was the 39-week period ended November 1, 2025. The first nine months of fiscal 2024 was the 39-week period ended November 2, 2024.

Current wording

Fiscal 2026 is the 52-week period ending January 30, 2027. Fiscal 2025 was the 52-week period ending January 31, 2026. The first three months of fiscal 2026 was the 13-week period ended May 2, 2026. The first three months of fiscal 2025 was the 13-week period ended May 3, 2025.

Previous wording

The following table presents selected items on the condensed consolidated statements of income (loss) as a percent of net sales:

Current wording

The following table presents selected items on the condensed consolidated statements of loss as a percent of net sales:

Previous wording

Net sales were $239.1 million for the three months ended November 1, 2025 compared to $222.5 million for the three months ended November 2, 2024, an increase of $16.6 million, or 7.5%. The increase in sales was primarily driven by a 7.6% increase in comparable sales, partially offset by the net closure of 24 stores subsequent to November 2, 2024. By region, North America sales increased $16.0 million or 8.6% and other international sales (which consists of Europe and Australia sales) increased $0.6 million or 1.7% for the three months ended November 1, 2025 compared to the three months ended November 2, 2024. Excluding the impact of changes in foreign exchange rates, North America sales increased $16.2 million or 8.7% and other international sales decreased $1.1 million or 3.1% for the three months ended November 1, 2025 compared to the three months ended November 2, 2024.

Current wording

Net sales were $193.3 million for the three months ended May 2, 2026 compared to $184.3 million for the three months ended May 3, 2025, an increase of $9.0 million, or 4.9%. The increase in sales was primarily driven by a 4.0% increase in comparable sales and impact of foreign exchange rate, partially offset by the net closure of 16 stores subsequent to May 3, 2025. By region, North America sales increased $5.8 million or 3.9% and other international sales (which consists of Europe and Australia sales) increased $3.2 million or 9.1% for the three months ended May 2, 2026 compared to the three months ended May 3, 2025. Excluding the impact of changes in foreign exchange rates, North America sales increased $5.5 million or 3.7%, while other international sales were relatively flat for the three months ended May 2, 2026 compared to the three months ended May 3, 2025.

Previous wording

Comparable sales increased 5.3% (reflecting a 7.2% increase in North America and a 3.9% decrease in other international) for the nine months ended November 1, 2025, 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 average unit retail partially offset by a decrease in units per transaction. By category, comparable sales were primarily driven by an increase in women's clothing, men's clothing, hardgoods, and accessories partially offset by a decrease in footwear.

Current wording

Comparable sales increased 4.0% (reflecting a 4.4% increase in North America and a 2.2% increase in other international) for the three months ended May 2, 2026, 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, comparable sales were primarily driven by increases in men's clothing, hardgoods, women's clothing, accessories, partially offset by a decrease in footwear.

Previous wording

Gross profit was $89.8 million for the three months ended November 1, 2025 compared to $78.3 million for the three months ended November 2, 2024, an increase of $11.5 million, or 14.7%. As a percent of net sales, gross profit increased 240 basis points for the three months ended November 1, 2025 to 37.6%. The increase was driven by 110 basis points of leverage in store occupancy costs related to both higher sales and closure of underperforming stores, 100 basis points of 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), and 30 basis points of benefit from decreased inventory shrinkage.

Current wording

Gross profit was $61.3 million for the three months ended May 2, 2026 compared to $55.3 million for the three months ended May 3, 2025, an increase of $6.0 million, or 10.9%. As a percent of net sales, gross profit increased 170 basis points for the three months ended May 2, 2026 to 31.7%. The increase was driven by 70 basis points of 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), 50 basis points of leverage in store occupancy costs related to both higher sales and closure of underperforming stores, 30 basis points of benefit in web shipping cost, and 20 basis points of benefit from decreased inventory shrinkage.

Previous wording

Selling, general and administrative expense was $78.0 million for the three months ended November 1, 2025 compared to $75.9 million for the three months ended November 2, 2024, an increase of $2.1 million, or 2.7%. SG&A expenses as a percent of net sales decreased 140 basis points for the three months ended November 1, 2025 to 32.7%. The decrease was driven by 110 basis points in non-wage store operating costs related to closure of stores year over year, 80 basis points of efficiencies in store wages due to higher sales and closure of low performing stores at the end of fiscal 2024, partially offset by a 40 basis point increase in annual incentive compensation.

Current wording

Selling, general and administrative expense was $76.5 million for the three months ended May 2, 2026 compared to $75.2 million for the three months ended May 3, 2025, an increase of $1.3 million, or 1.8%. SG&A expenses as a percent of net sales decreased 120 basis points for the three months ended May 2, 2026 to 39.6%. The decrease was driven by 150 basis points of benefit in the current year related to a $2.9 million litigation settlement in the first quarter of last year, 50 basis points of efficiencies in store wages due to higher sales, 40 basis points in non-wage store operating costs related to leverage in store depreciation due to higher sales, partially offset by 70 basis points of detriment related to one-time vendor credits benefiting the first quarter of last year, 20 basis points of increase in non-store wages and 20 basis points from other corporate cost.

Previous wording

Net income for the three months ended November 1, 2025 was $9.2 million, or $0.55 earnings per diluted share, compared with net income of $1.2 million, or $0.06 earnings per diluted share, for the three months ended November 2, 2024. These results were inclusive of one time discrete tax items recognized in the quarter that increased diluted earnings per share by approximately $0.09. Our effective income tax rate for the three months ended November 1, 2025 was a 26.1% provision for income taxes compared to a 63.4% provision for income taxes for the three months ended November 2, 2024. The decrease in effective income tax rate was primarily driven by improved operating results, the allocation of losses across the jurisdictions that we operate, as well as one time discrete tax items.

Current wording

Net loss for the three months ended May 2, 2026 was $13.3 million, or $0.82 loss per diluted share, compared with net loss of $14.3 million, or $0.79 loss per diluted share, for the three months ended May 3, 2025. Our effective income tax rate for the three months ended May 2, 2026 was a 8.2% benefit from income taxes compared to a 9.1% benefit from income taxes for the three months ended May 3, 2025. The decrease in effective income tax rate was primarily driven by improved U.S. operating results, losses in jurisdictions where we maintain valuation allowances, and one-time discrete tax items.

Previous wording

Our primary uses of cash are for operational expenditures, inventory purchases and capital investments, including new stores, store remodels, store relocations, store fixtures and ongoing infrastructure improvements. Additionally, we may use cash for the repurchase of our common stock. Historically, our main source of liquidity has been cash flows from operations.

Current wording

Our cash requirements are subject to change as business conditions warrant and opportunities arise. Our primary uses of cash are for operational expenditures, inventory purchases, common stock repurchases, and capital investments, including new stores, store remodels, store relocations, store fixtures and ongoing infrastructure improvements. Historically, our main source of liquidity has been cash flows from operations.

Previous wording

The significant components of our working capital are inventories and liquid assets such as cash, cash equivalents, current marketable securities and receivables, reduced by accounts payable, accrued payroll and accrued expenses. Our working capital position benefits from the fact that we generally collect cash from sales to customers the same day or within several days of the related sale, while we typically have longer payment terms with our vendors.

Current wording

The significant components of our working capital are inventories and liquid assets such as cash, cash equivalents, current marketable securities and receivables, reduced by accounts payable and accrued expenses. Our working capital position benefits from the fact that we generally collect cash from sales to customers the same day or within several days of the related sale, while we typically have longer payment terms with our vendors.

Previous wording

During fiscal 2025, we expect to spend approximately $10.0 million to $12.0 million on capital expenditures, a majority of which will relate to leasehold improvements and fixtures for the approximately 6 new stores 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.

Current wording

During fiscal 2026, we expect to spend approximately $14.0 million to $16.0 million on capital expenditures, a majority of which will relate to fixtures for the approximately 5 new stores we are planning to open in fiscal 2026 and remodels or relocations of existing stores. There can be no assurance that the number of stores that we actually open in fiscal 2026 will not be different from the number of stores we plan to open, or that actual fiscal 2026 capital expenditures will not differ from our expectations.

Previous wording

Net cash used in operating activities decreased by $29.8 million to $4.2 million used in operating activities for the nine months ended November 1, 2025 from $34.0 million used in operating activities for the nine months ended November 2, 2024. Net cash used in operating activities was $4.2 million for the nine months ended November 1, 2025 related to $70.0 million in unfavorable changes in our operating assets and liabilities and a $6.2 million net loss, excluding $72.0 million of noncash charges included within net loss for the period. 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 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.

Current wording

Net cash used in operating activities increased by $6.0 million to $28.1 million used in operating activities for the three months ended May 2, 2026 from $22.1 million used in operating activities for the three months ended May 3, 2025. Net cash used in operating activities was $28.1 million for the three months ended May 2, 2026 related to $36.2 million in unfavorable changes in our operating assets and liabilities and a $13.3 million net loss, excluding $21.4 million of noncash charges included within net loss for the period. 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. 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 $5.1 million for the nine months ended November 1, 2025 related to $12.6 million in sales, net of purchases, of marketable securities, partially offset by $7.5 million of capital expenditures primarily for new store openings, remodels, and relocations. Net cash provided by investing activities was $22.1 million for the nine months ended November 2, 2024, related to $32.1 million in sales, net of purchases, of marketable securities, partially offset by $10.0 million of capital expenditures primarily for new store openings, existing store remodels or relocation.

Current wording

Net cash used in investing activities increased by $22.1 million to $26.3 million used in investing activities for the three months ended May 2, 2026 from $4.2 million used in investing activities for the three months ended May 3, 2025. Net cash used in investing activities was $26.3 million for the three months ended May 2, 2026 related to $24.5 million in purchases, net of sales, of marketable securities, and $1.7 million of capital expenditures primarily for existing store remodels or relocation. Net cash used in investing activities was $4.2 million for the three months ended May 3, 2025, related to $2.0 million in purchases, net of sales, of marketable securities, and $2.2 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 1, 2025 was $37.7 million, related$38.2 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 $0.7 million in proceeds from the issuance and exercise of stock-based awards. 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.

Current wording

Net cash used in financing activities decreased by $19.0 million to $6.0 million used in financing activities for the three months ended May 2, 2026 from $25.0 million used in financing activities for the three months ended May 3, 2025. Net cash used in financing activities for the three months ended May 2, 2026 was $6.0 million, related to$6.0 million used in the repurchase of common stock. Net cash used in financing activities for the three months ended May 3, 2025 was $25.0 million, related to$25.2 million used in the repurchase of common stock and $0.2 million in net proceeds from the issuance and exercise of stock-based awards.

Previous wording

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 wording

As of May 2, 2026, we maintain a secured credit agreement with PNC Bank, National Association (the “bank”) which is scheduled to mature on December 23, 2027. 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.

Previous wording

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. The new Credit Facility does not carry any ongoing or unused balance fees. The Credit Facility will mature on December 20, 2025. We are currently discussing the renewal of the credit facility prior to its expiration.

Current wording

The 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 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. The credit facility does not carry any ongoing or unused balance fees.

Previous wording

There were no borrowings or open commercial letters of credit outstanding under the secured credit facility at November 1, 2025 or February 1, 2025. We had $3.2 million, and $2.7 million in issued, but undrawn, standby letters of credit backed by restricted cash deposits and marketable securities at the bank as of November 1, 2025 and February 1, 2025, respectively.

Current wording

There were no borrowings or open commercial letters of credit outstanding under the secured credit facility at May 2, 2026 or January 31, 2026. We had $3.2 million in issued, but undrawn, standby letters of credit backed by restricted cash deposits and marketable securities at the bank as of May 2, 2026 and January 31, 2026.

Previous wording

The teenage and young adult retail apparel, footwear, accessories and hardgoods industry is highly competitive. We compete with other retailers for vendors, teenage and young adult customers, suitable store locations, qualified store associates, management personnel, online marketing content, social media engagement and ecommerce traffic. Some of our competitors are larger than we are and have substantially greater financial and marketing resources, including advanced ecommerce market capabilities. Additionally, some of our competitors may offer more options for free and/or expedited shipping for ecommerce sales. Direct competition with these and other retailers may increase significantly in the future, which could require us, among other things, to lower our prices and could result in the loss of our customers. Current and increased competition could have a material adverse effect on our business, results of operations and financial condition.

Current wording

The teenage and young adult retail apparel, footwear, accessories and hardgoods industry is highly competitive. We compete with other retailers for vendors, teenage and young adult customers, suitable store locations, qualified store associates, management personnel, online marketing content, social media engagement and ecommerce traffic. Some of our competitors are larger than we are and have substantially greater financial and marketing resources, including advanced ecommerce market capabilities. Additionally, some of our competitors may offer more options for free and/or expedited shipping for ecommerce sales. Direct competition with these and other retailers may increase significantly in the future, which could require us, among other things, to lower our prices and could result in the loss of our customers. Furthermore, our competitors may incorporate artificial intelligence into their businesses more quickly or more successfully than us, which could impair our ability to compete effectively and adversely affect our results of operations. Current and increased competition could have a material adverse effect on our business, results of operations and financial condition.

Previous wording

We plan to continue to open new stores in the European and Australian markets. We may continue to expand internationally into other markets, either organically or through additional acquisitions. International markets may have different competitive conditions, consumer tastes and discretionary spending patterns than our existing North America market. The expansion strategy may present competitive, merchandising, hiring and distribution challenges that are different from those currently encountered. In addition, it will place increased demands on our operational, managerial and administrative resources. As a result, operations in international markets may be less successful than our operations in the North America. Additionally, consumers in international markets may not be familiar with us or the brands we sell, and we may need to build brand awareness in the markets. Furthermore, we have limited experience with the legal and regulatory environments and market practices in new international markets and cannot guarantee that we will be able to penetrate or successfully operate in these new international markets. We also expect to incur additional costs in complying with applicable foreign laws and regulations as they pertain to both our products and our operations. Accordingly, for the reasons noted above, our plans for international expansion include risks that could have a negative impact on our results of operations.

Current wording

We have opened stores in the European and Australian markets and will review opportunities to open stores in those markets as our operating results improve. We may continue to expand internationally into other markets, either organically or through additional acquisitions. International markets may have different competitive conditions, consumer tastes and discretionary spending patterns than our existing North America market. The expansion strategy may present competitive, merchandising, hiring and distribution challenges that are different from those currently encountered. In addition, it will place increased demands on our operational, managerial and administrative resources. As a result, operations in international markets may be less successful than our operations in the North America. Additionally, consumers in international markets may not be familiar with us or the brands we sell, and we may need to build brand awareness in the markets. Furthermore, we have limited experience with the legal and regulatory environments and market practices in new international markets and cannot guarantee that we will be able to penetrate or successfully operate in these new international markets. We also expect to incur additional costs in complying with applicable foreign laws and regulations as they pertain to both our products and our operations. Accordingly, for the reasons noted above, our plans for international expansion include risks that could have a negative impact on our results of operations.

Previous wording

Information systems are susceptible to an increasing threat of continually evolving cybersecurity risks. Similar to many other retail companies, we expect to continue to experience cyber attacks, including phishing, social engineering, and other attempts to breach, or gain unauthorized access to our systems and databases. To date, these attacks have not had a material impact on our operations, but we cannot provide assurance that they will not have an impact in the future. Unauthorized access, theft, use, destruction, or other compromises are becoming increasingly sophisticated and may occur through a variety of methods. The rapid evolution and increased adoption of artificial intelligence technologies by attackers may intensify our cybersecurity risks. If we fail to maintain or adequately maintain security systems, devices, and activity monitoring to prevent unauthorized access to our network, systems and databases containing confidential, proprietary and personally identifiable information, we may be subject to additional risk of adverse publicity, litigation or significant expense. Nevertheless, if unauthorized parties gain access to our networks, systems, or databases, they may be able to steal, publish, delete or modify confidential information. In such circumstances, we could be held liable to our customers or other parties or be subject to regulatory or other actions for breaching privacy rules and we may be exposed to reputation damage and loss of customers’ trust and business. This could result in costly investigations and litigation, civil or criminal penalties and adverse publicity that could adversely affect our financial condition, results of operations and reputation. Actual or anticipated attacks may cause us to incur increasing costs, including costs to deploy additional resources, train employees and engage third parties. Further, the regulatory environment surrounding information security, cybersecurity and privacy is increasingly demanding. If we are unable to comply with the new and changing security standards, we may be subject to fines, restrictions, and financial exposure, which could adversely affect our retail operations.

Current wording

Information systems are susceptible to an increasing threat of continually evolving cybersecurity risks. Similar to many other retail companies, we expect to continue to experience cyberattacks, including phishing, social engineering, and other attempts to breach, or gain unauthorized access to our systems and databases. To date, these attacks have not had a material impact on our operations, but we cannot provide assurance that they will not have an impact in the future. Unauthorized access, theft, use, destruction, or other compromises are becoming increasingly sophisticated and may occur through a variety of methods. The rapid evolution and increased adoption of artificial intelligence technologies by attackers may intensify our cybersecurity risks. If we fail to maintain or adequately maintain security systems, devices, and activity monitoring to prevent unauthorized access to our network, systems and databases containing confidential, proprietary and personally identifiable information, we may be subject to additional risk of adverse publicity, litigation or significant expense. Nevertheless, if unauthorized parties gain access to our networks, systems, or databases, they may be able to steal, publish, delete or modify confidential information. In such circumstances, we could be held liable to our customers or other parties or be subject to regulatory or other actions for breaching privacy rules and we may be exposed to reputation damage and loss of customers’ trust and business. This could result in costly investigations and litigation, civil or criminal penalties and adverse publicity that could adversely affect our financial condition, results of operations and reputation. Actual or anticipated attacks may cause us to incur increasing costs, including costs to deploy additional resources, train employees and engage third parties. Further, the regulatory environment surrounding information security, cybersecurity and privacy is increasingly demanding. If we are unable to comply with the new and changing security standards, we may be subject to fines, restrictions, and financial exposure, which could adversely affect our retail operations.

Previous wording

Companies across many industries are facing increasing scrutiny related to their environmental, social and governance practices. Our employees, customers, various types of investors, and other stakeholders are also increasingly focused on ESG practices and in recent years have placed increasing importance on the non-financial impacts. If our ESG practices do not meet stakeholder expectations, which continue to evolve, we may incur additional costs and our brand may be harmed.

Current wording

Companies across many industries are facing increasing scrutiny related to their environmental, social and governance (ESG) practices. Our employees, customers, various types of investors, and other stakeholders are also increasingly focused on ESG practices and in recent years have placed increasing importance on the non-financial impacts. If our ESG practices do not meet stakeholder expectations, which continue to evolve, we may incur additional costs and our brand may be harmed.