Q2 2026 Zumiez Inc. Earnings Call Transcript
Key Points
- International entities (Canada, Europe, Australia) delivered positive comparable sales growth of 2.1% in Q2, providing diversification and offsetting US weakness.
- Accessories and men's categories were positive comping, with accessories being the largest positive contributor.
- Dollars per transaction increased due to higher units per transaction, indicating customers are buying more items per visit.
- Strong balance sheet with $97.3 million in cash and marketable securities, no debt, and a $25 million unused credit facility.
- Share repurchases reduced share count by approximately 6% year-over-year, which will benefit full-year EPS.
- Inventory levels are well-managed, down 0.6% on a constant currency basis, with no major inventory problem in footwear.
- International business is executing a premium pricing strategy to drive margin expansion and profitability optimization.
- Company is actively working on merchandise assortment changes and customer experience initiatives to improve US performance.
- Net sales decreased 2.5% in Q2, with comparable sales down 2.1%, missing expectations due to US softness.
- US comparable sales declined 2.9% in Q2 and are trending down 3.9% quarter-to-date through Labor Day.
- Footwear is a significant headwind, accounting for 70% of the total US sales decline, and has been challenged since Q2 2025.
- Gross margin decreased 20 basis points to 35.3% due to store occupancy deleverage, partially offset by tariff refunds.
- SG&A expense increased 50 basis points as a percentage of sales, driven by higher store operating costs and wage deleverage.
- Operating loss of $1.3 million in Q2 compared to prior year operating income of $0.1 million.
- Net loss widened to $2.7 million or $0.17 per share from $1 million or $0.06 per share last year.
- Q3 guidance is conservative, expecting sales decline of 5.5% to 7% and comparable sales down 5% to 6.5%, with EPS of $0 to $0.10 versus $0.55 last year.
- Full-year operating margin is now expected to be down slightly, compared to previous guidance of 50 to 100 basis points growth.
- Effective tax rate is expected to be roughly 55% for fiscal 2026, up from 44% in fiscal 2025.
- Plans to close approximately 16 stores in fiscal 2026, including 10 in North America, which will negatively impact sales by $12 million.
Good afternoon, ladies and gentlemen, and welcome to the Zumiez Inc. second-quarter fiscal 2026 earnings conference call. (Operator Instructions)
Before we begin, I would like to remind everyone of the company's Safe Harbor language. This conference call includes comments concerning Zumiez Inc's business outlook and contains forward-looking statements. These forward-looking statements and all other statements that may be made on this call that are not based on historical facts are subject to risks and uncertainties. Actual results may differ materially.
Additional information concerning a number of these factors that could casue actual results to differ materially from the information that will be disclosed is available in Zumiez's filings with the SEC.
At this time, I would like to turn the call over to Rick Brooks, Chief Executive Officer. Mr. Brooks?
With me today is Chris Work, our Chief Financial Officer. I'll provide some commentary on our second-quarter results
| Access to All Earning Calls and Stock Analysis | |
| 30-Year Financial on one screen | |
| All-in-one Stock Screener with unlimited filters | |
| Customizable Stock Dashboard | |
| Real Time Insider Trading Transactions | |
| 8,000+ Institutional investors’ 13F holdings | |
| Powerful Excel Add-in and Google sheets Add-on | |
| All data downloadable | |
| Quick customer support | |
| And much more... |
Trustpilot
We'd love to learn more about your experiences on GuruFocus.com and how we can improve!
Take Survey
