During the second quarter of 2009, Zumiez incurred a charge of $1.3 million, or 3 cents per share related to the settlement agreement of a previously disclosed lawsuit.
Net sales in the reported quarter increased 14.7% year over year to $97.7 million from $85.2 million a year ago. Comparable store sales increased 9.3% in the quarter compared with a decrease of 18.8% in second-quarter 2009.
Cost of goods sold in the quarter increased 10.7% year over year to $37 million while gross margin also increased 250 basis points to 31.4% in the quarter propelled by net sales increase.
Selling, general and administrative expenses were $31 million, up 3.87% year over year.
The company reported an operating loss of $0.2 million compared with a loss of $5.2 million in the prior-year quarter.
Financial Update
Cash and cash equivalents at quarter-end were $6.8 million, down from $21.3 million at the end of the second quarter of 2009.
Total long-term liabilities increased to $29.8 million at the end of the reported quarter from $27.2 million at the end of second-quarter 2009.
Store Update
As of July 31, 2010, Zumeiz operated 393 stores.
Guidance
For the third quarter of 2010, management expects comparable store sales to increase in the mid single-digit range and net income in a range of 21–24 cents per share.
The company plans to open 27 new stores in fiscal 2010.
We maintain our “Neutral” recommendation on Zumiez. The quantitative Zacks #3 Rank (short-term Hold rating) for the company indicates no clear directional pressure on the shares over the near term.
ZUMIEZ INC (ZUMZ
): Free Stock Analysis Report
Zacks Investment Research
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