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Zumiez Inc. (ZUMZ - Free Report) reported its loss per share for first-quarter fiscal 2022. Its metrics compared unfavorably with the reported figures of the previous year. Results were hurt by numerous headwinds, including global supply-chain issues, inflation, higher logistics costs, and a tight labor market.

Over the past six months, shares of this Zacks Rank #4 (Sell) player have decreased 25.6% compared with the industry’s 31% decline.

Results in Detail

Zumiez posted a quarterly loss of 2 cents per share. The Zacks Consensus Estimate was of earnings of 7 cents. The bottom line also came against earnings of $1.03 per share that were reported in the year-earlier quarter.

Zumiez Inc. Price, Consensus, and EPS Surprise

Zumiez Inc. price-consensus-eps-surprise-chart | Zumiez Inc. Quote

Although total net sales of $220.7 million came above the Zacks Consensus Estimate of $218 million, the same fell 20.9% from the year-ago period’s reading. This year-over-year decline was driven by gains from the U.S. stimulus realized in early 2021 and slight inflationary pressures. These were somewhat offset by higher sales across each of the international geographies.

From a regional perspective, North America net sales were $186.3 million, down 25.1% year-over-year. Other international sales, comprising Europe and Australia, were $34.4 million, up 13% year-over-year. Excluding the impacts of foreign currency translations, North America net sales fell 25% and other international net sales rose 21.8% from the respective fiscal 2021 readings.

Gross profit decreased 29.8% year-over-year to $72.4 million. Gross margin decreased 420 basis points (bps) to 32.8%. The year-over-year fall in gross margin was mainly due to lower sales along with elevated expenses, including increased logistics and labor costs.

SG&A expenses jumped 4.4% year-over-year to $71.9 million during the quarter under review. As a percentage of sales, SG&A expenses increased 790 bps year-over-year to 24.7%.

Zumiez reported an operating profit of $0.5 million, down from $34.3 million recorded in the year-earlier quarter. Operating margin was 0.2%, significantly down from 12.3% witnessed in the year-ago period.

Financial & Other Updates

As of April 30, 2022, ZUMZ had cash and current marketable securities of $173 million compared with $400.4 million as of May 1, 2021. The decline was due to capital expenditures and share repurchases, partly offset by cash provided through operations.

Total shareholders’ equity at the end of the quarter stood at $376.9 million. Zumiez had no debt at the end of the fiscal first quarter and maintained fully unused credit facilities. ZUMZ ended the fiscal year with $141.9 million inventory, up 4% year-over-year.

Zumiez repurchased 1.9 million shares for $83.3 million during the first quarter of 2022. ZUMZ has no open repurchase authorizations at present. As of May 28, 2022, Zumiez operated 741 stores, including 601 in the United States, 52 in Canada, 69 in Europe, and 19 in Australia.

Other Updates

Net sales for the four-week period ended May 28, 2022 tumbled 20.9% year-over-year, but dipped 3.3% from the level during the four-week period ended June 1, 2019.

From a regional perspective, net sales for the North America business fell 23.5% year-over-year in the aforementioned period, while the metric at the Other international business dipped 0.3% from last year’s level and increased 55.4% from the same-period level in 2019.

All categories were down in total sales from the year-ago period’s level. Men's remained the most negative category, followed by hard goods, accessories, women's, and footwear.

Outlook

For the fiscal second quarter, net sales are projected in the band of $232-$239 million. Consolidated operating margins are likely to come between 5% and 6.5% with earnings per share of 45-55 cents.

For fiscal 2022, total sales will decline in the high-single digits from the fiscal 2021 reading. Earnings per share are likely to come between $3.55 and $3.80, indicating a decline from $4.85 delivered in fiscal 2021. Capital expenditures are anticipated to be between $30 million and $32 million for fiscal 2022.

In fiscal 2022, management intends opening about 34 stores, including nearly 15 stores in North America, 14 stores in Europe, and 5 stores in Australia.

Stocks to Consider

We highlighted three better-ranked stocks in the Retail - Wholesale sector, namely Tecnoglass (TGLS - Free Report), Boot Barn Holdings (BOOT - Free Report), and Fastenal (FAST - Free Report).

Tecnoglass engages in manufacturing and selling architectural glass and windows and aluminum products for the residential and commercial construction industries. It sports a Zacks Rank #1 (Strong Buy). Shares of TGLS have jumped 12.9% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Tecnoglass’ current financial-year sales and earnings per share suggests growth of 21.3% and 28.7%, respectively, from the year-ago period's reported figures. TGLS has a trailing four-quarter earnings surprise of 28.3%, on average.

Boot Barn, a lifestyle retail chain devoted to western and work-related footwear, apparel, and accessories, flaunts a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 25.2%, on average. Shares of BOOT have rallied 19.8% in the past year.

The Zacks Consensus Estimate for Boot Barn’s current financial-year sales and earnings per share suggests growth of 17% and 4.4%, respectively, from the year-ago period’s reported figures. BOOT has an expected EPS growth rate of 20% for three to five years.

Fastenal, a national wholesale distributor of industrial and construction supplies, has a Zacks Rank #2 (Buy). The company has a trailing four-quarter earnings surprise of 5%, on average. Shares of FAST have risen 0.6% in the past year.

The Zacks Consensus Estimate for Fastenal's current financial-year sales and earnings per share suggests growth of 15.4% and 16.3%, respectively, from the year-ago period. FAST has an expected EPS growth rate of 9% for three to five years.