Zumiez Q4 Profit Rises - Update

(RTTNews) - Zumiez Inc. (ZUMZ) Thursday reported an increase in profit for the fourth quarter, driven by higher revenues, improved margins and one-time gains.

Everett, Washington-based Zumiez' fourth-quarter profit rose to $26.9 million or $0.89 per share from $22.9 million or $0.74 per share a year ago.

On average, eighteen analysts polled by Thomson Reuters expected earnings of $0.62 per share for the fourth quarter. Analysts' estimates typically exclude special items.

Results for the quarter include a $5.8 million benefit for the reversal of contingent earn-out accruals associated with the acquisition of Blue Tomato, a $3.3 million benefit for the correction of an error related to the accounting for rent expenses, and a $0.6 million expense for the amortization of intangible assets.

Zumiez said sales for the fourth quarter grew 1.1 percent to $226.8 million from $224.4 million a year ago. Nineteen analysts had a consensus revenue estimate of $226.16 million for the fourth quarter.

Same-store sales, or sales from stores open at least a year, decreased 2.2 percent.

Gross margin improved to 38.7 percent from 38.2 percent last year, while operating margin increased to 17.8 percent from 16.1 percent last year.

Chief Executive Rick Brooks said, "The fourth quarter proved to be more challenging than we expected both domestically and abroad. Weak mall traffic in December and January created a highly promotional retail environment that pressured our sales and deleveraged our cost structure.

Harsh winter across most of the U.S. has broadly hurt retailers as shoppers chose to stay at home. Retailers also had to wade through a tough holiday season that was marked by heavy discounting and heightened competition.

Looking forward to the first quarter, the company expects a loss of about $0.02 per share to earnings of about $0.03 per share and sales of $156 million to $160 million. Analysts currently expect earnings of $0.11 per share on revenues of $160.10 million for the first quarter.

ZUMZ closed Thursday's regular trade at $24.44, up $0.48 or 2.00%, on the Nasdaq. The stock, however, fell $0.48 or 1.96%, in after hours trade.