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Lynnwood-based Zumiez’ income rises with its growth

The Lynnwood-based retailer of sports apparel admits to a slow start to the year but holds to its plans for growth.

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By Michelle Dunlop
Herald Writer
Published:
Zumiez's net income increased 12.9 percent for 2012 over the previous year, based on strong fourth-quarter results, the Lynnwood-based company reported Thursday.
The sports apparel retailer reported earnings of $42.2 million, or $1.35 per diluted share. That compares to $37.4 million, or $1.20 per diluted share, in 2011. Zumiez saw a 22 percent increase in net sales in the fourth quarter, though sales at locations open at least a year declined.
The retailer of sports apparel, equipment and footwear acknowledged a slow start to 2013 but remains committed to a long-term strategy of growth for its bricks-and-mortar stores and its e-commerce business.
"We believe our unique approach to the marketplace ... will continue to separate us," Rick Brooks, Zumiez chief executive, said Thursday in a call with stock analysts.
With 472 stores in the U.S. at the end of 2012, Zumiez will continue its charge this year toward operating 600 to 700 shops. In 2013, Zumiez will open 60 stores around the world, continuing a push in Canada with as many as 10 stores and adding six stores in Europe. New stores in Austria and Germany are part of the company's European expansion following the purchase of sporting retailer Blue Tomato last year.
So far, Zumiez officials have been pleased with Blue Tomato's performance and noted the corporate culture of the European retailer is a good match. However, Zumiez' Brooks is more focused on how Blue Tomato fares over the next five to 10 years than the short term.
"Europe is a huge (sporting retail) market," he said.
Along with the addition of new stores, Zumiez is looking to beef up e-commerce, which accounted for 8.3 percent of domestic business in 2012. That's up from 1 percent five years ago, Brooks said.
"We're looking to launch a new Web platform in both the U.S. and Europe this spring," he said.
The new Web platform is to help Zumiez cater to the various ways consumers are shopping today thanks to smart phones, tablets and similar devices. The retailer also launched last year a customer loyalty program, Zumiez Stash, which rewards shoppers for purchases as well as enabling social-media interaction with Zumiez.
"It's definitely a world where the consumer has the power," Brooks said. "It's a world that we can embrace and I think we can do great things."
Zumiez provided an earnings estimate only for the first quarter of 2013. The company projects net income of $141 million to $144 million, or 4 cents to 7 cents per diluted share, which includes charges for the acquisition of Blue Tomato. Analysts were expecting net income of 13 cents per share on $144.9 million in revenue, on average.
Shares of Zumiez dropped 27 cents to $24.22 during regular trading Thursday. The company's stock declined another 22 cents in after-hours trades.
Reporter Michelle Dunlop: 425-339-3454 or mdunlop@heraldnet.com.
Story tags » ClothingRetailElectronic CommerceZumiez

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