Zumiez, Inc. CEO Rick Brooks described the first quarter of 2024 as a positive start, despite a decline in sales and net loss.
According to reports, the company saw improved year-over-year trends and positive sales in North America. However, international sales declined due to a focus on full-price selling in Europe.
The gross profit as a percentage of sales increased to 29.3%, driven by improved product margins and cost leverage.
SG&A expense increased to 40.6% of net sales due to various factors. Operating loss improved slightly, and the net loss decreased from the previous year.
Overall, the company is optimistic about progressing towards positive comparable sales and improved profitability.
“With sales growth in 2024, we anticipate that we’ll leverage SG&A costs year-over-year beyond the benefit we will receive of moving past the $41.1 million goodwill impairment charge we recorded in the fourth quarter of 2023,” Company CFO Chris Work said. “With the previously mentioned assumptions, we believe we will return to positive operating margins for the full year; while effective tax rates are likely to fluctuate significantly by quarter, we anticipate that our full-year effective tax rate will be roughly 47 percent in fiscal 2024.”
Zumiez is planning to shut down about 20 to 25 stores in fiscal 2024, mostly in North America. The final number of closures might change based on how well each store is doing and the company's discussions with its landlords. They also expect to spend between $14 million and $16 million on capital expenses in 2024, which is less than the previous years due to fewer store openings.