ZUMZ

It has been about a month since the last earnings report for Stitch Fix (SFIX). Shares have added about 23.1% in that time frame, outperforming the S&P 500. But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Stitch Fix due for a pullback? Well, first let's take a quick look at the most recent earnings report in order to get a better handle on the recent drivers for Stitch Fix, Inc. before we dive into how investors and analysts have reacted as of late. Stitch Fix reported a narrower-than-expected adjusted loss for the fourth quarter of fiscal 2026, while revenues fell slightly short of the Zacks Consensus Estimate. Revenues and revenue per active client increased year over year, but the active-client count declined. Management expects a more challenging consumer environment and higher client acquisition costs to temper growth in fiscal 2027. Its adjusted EBITDA outlook also reflects planned investments in advertising and technology, including artificial intelligence. SFIX reported an adjusted loss of 1 cent per share, narrower than the Zacks Consensus Estimate of an adjusted loss of 6 cents and the year-ago adjusted loss of 7 cents. On a GAAP basis, the company reported a loss of 2 cents per share compared with a loss of 7 cents a year earlier. Net revenues of $324.4 million increased 4.2% from $311.2 million a year earlier, but came in just below the $325 million consensus estimate. The quarter marked the company's sixth consecutive quarter of year-over-year revenue growth. Active clients totaled 2.277 million, down 1.4% both year over year and sequentially. Revenue per active client reached a record $592, up 7.8% from the prior-year quarter. Fix average order value rose 4.9%, supported by more items per Fix and a favorable assortment mix. Both the women's and men's Fix businesses grew, with the men's business posting double-digit growth for the fifth consecutive quarter. Across the women's and men's businesses, activewear and athleisure sales increased 21% year over year, while footwear grew 14%. Client retention improved sequentially for the eighth consecutive quarter. Management said higher acquisition costs weighed on its ability to attract and re-engage clients. In the fiscal fourth quarter, the company's gross profit rose 4.2% year over year to $141.4 million, while gross margin held steady at 43.6%. Stitch Fix said inventory management helped offset higher transportation costs and investments in new merchandise categories. Selling, general and administrative expenses declined to $145.7 million from $146.9 million a year earlier. Advertising represented 9.9% of revenues. The operating loss narrowed to $4.4 million from $11.2 million. Adjusted EBITDA increased to $10.8 million from $8.7 million in the prior-year quarter, exceeding the company's $7-$10 million guidance range. Adjusted EBITDA margin improved to 3.3% from 2.8%. Management attributed the guidance beat largely to lower fixed operating expenses. Stitch Fix ended fiscal 2026 with $220.9 million in cash, cash equivalents and investments, and no debt. The company generated $9.1 million in operating cash flow and $4.4 million in free cash flow during the fourth quarter. SFIX repurchased 2.7 million shares for $11.3 million in the fourth quarter. For fiscal 2026, it bought back 7.2 million shares for $26.4 million, leaving $93.6 million under the existing authorization. Full-year net revenues increased 6.4% to $1.35 billion, marking the company's first full year of revenue growth since fiscal 2021. Gross margin was 43.7%, down 70 basis points year over year. Adjusted EBITDA increased to $53.4 million from $49.1 million, while adjusted EBITDA margin edged up to 4% from 3.9%. The full-year net loss narrowed to $12.6 million from $28.8 million, and free cash flow increased to $19.8 million from $9.3 million. For the first quarter of fiscal 2027, management expects revenues of $323-$328 million, implying a year-over-year decline of 5.6% to 4.1%. Adjusted EBITDA is projected at $3-$6 million. The first-quarter outlook reflects two temporary factors affecting Fix volume. Some shipments were moved from the first quarter of fiscal 2027 into the fourth quarter of fiscal 2026. An unintended August change to the post-checkout offer flow also limited the number of clients eligible to request another Fix. Management said the issue has been corrected and will not affect results beyond the first quarter. For fiscal 2027, Stitch Fix expects revenues to be in the range of $1.31-$1.36 billion, representing a year-over-year change ranging from a 2.8% decline to 0.9% growth. Adjusted EBITDA is forecast at $27-$42 million compared with $53.4 million in fiscal 2026. Management expects gross margin of 43-44% and positive free cash flow for the year. The outlook reflects a lower active-client starting point, a more challenging consumer environment and planned growth investments. In the past month, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted -92.86% due to these changes. At this time, Stitch Fix has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy. Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in. Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Stitch Fix has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months. Stitch Fix belongs to the Zacks Retail - Apparel and Shoes industry. Another stock from the same industry, Zumiez (ZUMZ), has gained 6.9% over the past month. More than a month has passed since the company reported results for the quarter ended July 2026. Zumiez reported revenues of $208.96 million in the last reported quarter, representing a year-over-year change of -2.5%. EPS of -$0.17 for the same period compares with -$0.06 a year ago. For the current quarter, Zumiez is expected to post earnings of $0.07 per share, indicating a change of -84.8% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days. Zumiez has a Zacks Rank #4 (Sell) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of A. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Stitch Fix, Inc. (SFIX) : Free Stock Analysis Report Zumiez Inc. (ZUMZ) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Zumiez has gotten torched over the last six months - since April 2026, its stock price has dropped 37.8% to $14.08 per share. This was partly due to its softer quarterly results and may have investors wondering how to approach the situation. Is now the time to buy Zumiez, or should you be careful about including it in your portfolio? See what our analysts have to say in our full research report, it's free. Even with the cheaper entry price, we're sitting this one out for now. Here are three reasons why there are better opportunities than ZUMZ, plus one stock we'd rather own. A retailer's store count influences how much it can sell and how quickly revenue can grow. Zumiez operated 714 locations in the latest quarter. Over the last two years, the company has generally closed its stores, averaging 2.5% annual declines. When a retailer shutters stores, it usually means that brick-and-mortar demand is less than supply, and it is responding by closing underperforming locations to improve profitability. With $932.8 million in revenue over the past 12 months, Zumiez is a small retailer, which sometimes brings disadvantages compared to larger competitors benefiting from economies of scale and negotiating leverage with suppliers. Growth gives us insight into a company's long-term potential, but how capital-efficient was that growth? Enter ROIC, a metric showing how much operating profit a company generates relative to the money it has raised (debt and equity). Zumiez historically did a mediocre job investing in profitable growth initiatives. Its five-year average ROIC was 0.2%, lower than the typical cost of capital (how much it costs to raise money) for consumer retail companies. We cheer for all companies serving everyday consumers, but in the case of Zumiez, we'll be cheering from the sidelines. Following the recent decline, the stock trades at 42.9× forward P/E (or $14.08 per share). This multiple tells us a lot of good news is priced in - we think there are better stocks to buy right now. We'd suggest looking at our favorite semiconductor picks and shovels play. ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI is taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies. Our AI system flagged Palantir before it ran 1,662% between October 2022 and February 2026. AppLovin before it ran 753% between February 2024 and February 2026. Nvidia before it ran 1,178% between January 2023 and February 2026. Each week it produces 6 new names that pass the same tests. Get Our Top 6 Stocks for Free HERE. Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+1,154% between June 2020 and June 2025). Find your next big winner with StockStory today.

On September 10, Zumiez Inc. (NASDAQ:ZUMZ) reported weaker-than-expected results for its second quarter ended August 1, 2026, with the results falling short of Wall Street estimates and sending the stock lower. For the second quarter of fiscal 2026, Zumiez Inc. (NASDAQ:ZUMZ) reported net sales of $209 million, down 2.5% year-over-year. Comparable sales declined 2.1%, with the weakness mainly coming from the US. Canada, Europe, and Australia all had positive comparable sales growth for the quarter. The company said it saw strong sales growth across its international markets, but softer domestic sales and lower foot traffic weighed on overall results. The company also posted a net loss of $2.7 million, or $0.17 per share, compared with a net loss of $1.0 million, or $0.06 per share, in the second quarter of fiscal 2025. Third-Quarter Outlook Disappoints, But Is It All Bad? Zumiez Inc. (NASDAQ:ZUMZ) introduced third-quarter guidance, which also failed to provide much relief as it came in below Wall Street expectations. For the three months ending October 31, 2026, the company expects net sales of $222 million to $226 million, while earnings per share are projected to range from $0.00 to $0.10. More importantly, management also lowered its broader outlook, saying fiscal 2026 sales are now expected to decline by low single digits and operating margin to fall slightly, versus its previous expectation for 50 to 100 basis points of operating-margin expansion. Despite the weaker operating performance, Zumiez Inc. (NASDAQ:ZUMZ) continues to maintain an impressive financial position. As of August 1, 2026, the company had $97.3 million in cash and marketable securities, no debt, and an unused $25 million credit facility. The company also continued to return capital to shareholders as it repurchased 1.2 million shares for a total cost of $23.2 million during the second quarter. For its international business, Zumiez Inc. (NASDAQ:ZUMZ) said it is focusing on a premium pricing strategy aimed at expanding margins and improving profitability. However, in the US, the company is working on merchandise assortment changes and customer experience initiatives in an effort to improve performance. What the Numbers Say Hedge fund interest in the stock remained unchanged in the second quarter. According to Insider Monkey's database, 16 hedge funds held positions in Zumiez Inc. (NASDAQ:ZUMZ) in the second quarter of 2026, the same number as in the first quarter. Meanwhile, short interest stood at 10.99% of the company’s float as of August 31, indicating a notable level of bearish positioning in the stock. The stock has faced significant pressure this year, declining nearly 45% year-to-date as of September 14. Zumiez Inc. (NASDAQ:ZUMZ) currently trades at $14.38, close to its 52-week low of $13.64 and well below its 52-week high of $31.70. At this price, the shares trade at a forward P/E of 9.83. Zumiez Inc.’s (NASDAQ:ZUMZ) low valuation and debt-free balance sheet provide some positive support, but the latest results show that the US business remains the key weakness. Q3 guidance also points to continued pressure. With the stock already down sharply and trading near its 52-week low, investors may want to wait and see whether the company's US initiatives can stabilize sales before treating the lower valuation as a stronger buying signal. For now, weak U.S. sales and lower guidance make it too early to conclude that the selloff has gone too far. While we acknowledge the potential of ZUMZ as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: Bernstein Backs Shopify (SHOP) Despite Stock Drop, Is It Time to Buy? and Could Tesla’s (TSLA) Cybercab Unlock a New Growth Driver?. Disclosure: None. Follow Insider Monkey on Google News.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Performance was characterized by a sharp divergence between a softening U.S. market and positive comparable sales growth across international segments in Canada, Europe, and Australia. The U.S. sales deceleration was primarily driven by a significant downturn in the footwear category, which accounted for 70% of the total domestic sales decline through Labor Day. Management attributes the footwear headwind to a cyclical shift away from legacy lifestyle athletic silhouettes that have historically been a core strength for the brand. Operational focus has shifted toward accelerating product 'newness' in apparel and private labels to counter the rapid evolution of consumer trends and a general drop in transaction volume. International success is being driven by a premium pricing strategy and a refreshed product mix that emphasizes distinctive offerings and higher-margin private label growth. The company is utilizing its data initiatives to refine customer communication and marketing effectiveness, aiming to capture sales more efficiently during low-traffic periods. Q3 guidance assumes a further deceleration in sales compared to quarter-to-date trends, reflecting a historical pattern where consumer activity drops significantly between major shopping events. Management anticipates footwear comparisons will become easier starting in Q4 2026, suggesting the category may be approaching the bottom of its current down cycle. Full-year operating margin expectations have been revised downward to 'down slightly' from previous growth targets of 50 to 100 basis points due to increased consumer pressure. Product margins in Q3 are expected to face 20-40 basis points of pressure, driven by the domestic slowdown and a higher mix of lower-margin international sales. Strategic investments for the remainder of the year are focused on inventory uniqueness and identifying the 'next trend brand' to drive recovery in 2027. The company completed a $40 million share repurchase program in early September, which is expected to benefit full-year EPS but acts as a headwind during loss-reporting quarters. Gross margin was impacted by 60 basis points of deleverage in store occupancy costs due to lower sales, though this was largely offset by a 50-basis-point benefit from tariff refunds. Inventory levels remain flat year-over-year on a constant currency basis, which management views as a position of strength that avoids the need for aggressive, margin-dilutive liquidations. Store footprint optimization continues with plans to close approximately 16 stores globally in fiscal 2026 while opening only 5 new locations in the U.S. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management confirmed the struggle is concentrated in 'lifestyle athletic' footwear, where big brands are currently trending downward. The strategy to recover involves working with partners to drive uniqueness and finding new trend brands to offset the decline in legacy silhouettes. Zumiez has avoided the heavy price-point promotions seen at competitors because they feel their inventory position is healthy and well-managed. While some clearing of footwear has occurred on the website, management does not believe they have a major inventory problem requiring drastic action. The cautious Q3 outlook (down 5.5% to 7%) is intentionally lower than the -3.5% trend seen through Labor Day to account for the 'post-back-to-school' lull. Management noted that when trends move in this industry, they move quickly, necessitating a conservative stance until new apparel trends fully take hold.

This article first appeared on GuruFocus. Net Sales: Decreased 2.5% to $209 million in Q2 fiscal 2026, versus $214.3 million in Q2 fiscal 2025. Comparable Sales: Down 2.1% for Q2; North America comps down 2.9%, international comps up 2.1%. North American Net Sales: $173.9 million, down 3.4% year over year (down 3.3% constant currency). International Net Sales: $35.1 million (Europe and Australia), up 2.5% year over year (up 0.8% constant currency). Gross Profit: $73.9 million, versus $76.1 million in the prior-year quarter. Gross Margin: 35.3% of sales, down 20 basis points from 35.5% a year ago. SG&A Expense: $75.2 million, or 35.9% of net sales, versus $75.9 million, or 35.4% of net sales, last year. Operating Loss: $1.3 million, or 0.6% of net sales, versus prior-year operating income of $0.1 million, or 0.1% of net sales. Net Loss: $2.7 million, or $0.17 per share, versus a net loss of $1 million, or $0.06 per share, a year ago. Effective Tax Rate: Negative 91.5% for the quarter, versus 210% a year ago. Cash and Current Marketable Securities: $97.3 million as of August 1, 2026, versus $106.7 million as of August 2, 2025. Cash Flow from Operations: $35.7 million. Capital Expenditures: $10.6 million. Debt: No debt on the balance sheet; full $25 million unused credit facility maintained. Share Repurchases: 1.2 million shares repurchased in Q2 for $23.2 million; year-to-date 1.5 million shares for $29.5 million. Inventory: $157.3 million, versus $157.7 million last year (down 0.6% constant currency). Q3-to-Date Net Sales: Down 4.3% for the 37-day period ended September 7, 2026. Q3-to-Date Comparable Sales: Down 3.5%; North America down 3.9%, international up 0.5%. Q3 Sales Guidance: $222 million to $226 million, a decline of 5.5% to 7% year over year. Q3 Comparable Sales Guidance: Negative 5% to negative 6.5%. Q3 Product Margin Guidance: Down 20 to 40 basis points. Q3 Operating Income Guidance: 1% to 1.7% of sales. Q3 EPS Guidance: $0 to $0.10, versus $0.55 in the prior year. Full-Year Sales Outlook: Down low single digits, including $12 million negative impact from closed stores. Full-Year Gross Margin Outlook: Roughly flat as a percent of sales; product margin roughly flat. Full-Year Operating Margin Outlook: Down slightly versus prior guidance of 50 to 100 basis points of growth. Full-Year Effective Tax Rate Outlook: Approximately 55%, versus 44% in fiscal 2025. Store Openings/Closings: Five new US stores planned; approximately 16 closures (10 North America, 6 international) in fiscal 2026. Full-Year Capital Expenditures Outlook: $13 million to $15 million. Depreciation and Amortization Outlook: Approximately $19.2 million, down from $21.3 million in fiscal 2025. Diluted Share Count Outlook: Approximately 15.8 million shares for the full year. Warning! GuruFocus has detected 2 Warning Signs with AENT. Is ZUMZ fairly valued? Test your thesis with our free DCF calculator. Release Date: September 10, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. 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. Q: Rick, can you give your take on what is happening in footwear, including weakness in legacy silhouettes and a possible shift from athletic to non-athletic? How are you planning to pivot the assortment? A: CEO Richard Brooks said the footwear challenge has persisted for several quarters, with Zumiez selling lifestyle athletic footwear a niche that has struggled given its product mix. The company is trying different things and working with brand partners to drive uniqueness into footwear, and he expects to find the bottom of the cycle as it anniversaries big negative comps in Q4. Success will depend on unique product and finding the next trend brand. Q: There has been talk of a particularly promotional back-to-school season in footwear. How are you addressing that, and to what extent is it pressuring margins? A: CEO Richard Brooks said Zumiez feels good about its footwear inventory position after working closely with partners over recent quarters to manage exposure, and he does not see major inventory risk. The company has not been as promotional on price point as some competitors, though it is clearing some footwear, which has pressured margins somewhat in recent quarters. Q: Your Q3 comp outlook is worse than quarter-to-date trends. How much of the quarter is already booked, and how much of the expected deterioration is conservatism versus the pattern of the consumer disappearing between events? A: CFO Christopher Work said the company is just over 50% through the quarter from a sales perspective and expects the back half to be worse than back-to-school, consistent with the last several years when performance is much stronger during back-to-school and slower when there is less reason to shop. He also cited conservatism after Q2 came in below expectations and noted that trends have moved quickly, so the company is planning cautiously for the rest of the quarter. Q: What drove the second-quarter sales decline, and how did regional performance differ? A: CFO Christopher Work said net sales fell 2.5% to $209 million from $214.3 million, with comparable sales down 2.1%. Canada, Europe, and Australia all posted positive comparable sales growth, while the negative consolidated comp was driven by US softness. North American net sales were $173.9 million, down 3.4%, and North American comparable sales fell 2.9%, while international comparable sales rose 2.1%. Q: Which merchandise categories helped or hurt comparable sales in the second quarter? A: CFO Christopher Work said accessories was the largest positive comping category, followed by men's. Footwear was the largest negative comping category, followed by hard goods and women's. The consolidated comparable sales decrease was driven by lower transactions, partially offset by higher dollars per transaction, which rose on increased units per transaction offset by lower average unit retail. Q: What drove the second-quarter gross margin change? A: CFO Christopher Work said gross profit decreased to $73.9 million from $76.1 million, and gross margin was 35.3% of sales versus 35.5% a year ago. The 20 basis point decline was primarily due to 60 basis points of deleverage in store occupancy costs on lower sales, partially offset by 50 basis points of benefit from tariff refunds. Q: What caused the increase in SG&A expense as a percentage of sales in the second quarter? A: CFO Christopher Work said SG&A was $75.2 million, or 35.9% of net sales, versus $75.9 million, or 35.4%, a year ago. The 50 basis point increase was driven by higher non-wage store operating costs, deleverage in store wages and non-store wages on lower sales, and higher other corporate costs, partially offset by lower annual incentive compensation and a prior-year litigation settlement benefit. Q: How did the company's balance sheet and cash position look at the end of the second quarter? A: CFO Christopher Work said the company ended the quarter with $97.3 million in cash and current marketable securities, down from $106.7 million a year ago, primarily due to $34.5 million in share repurchases and $10.6 million in capital expenditures, partially offset by $35.7 million in cash flow from operations. Zumiez has no debt and maintains its full $25 million unused credit facility. Q: What is the third-quarter guidance? A: CFO Christopher Work said total sales are expected to be $222 million to $226 million, down 5.5% to 7% year over year, with comparable sales between negative 5% and negative 6.5%. Product margin is expected to be down 20 to 40 basis points on US weakness and higher international penetration at lower margins. Consolidated operating income is expected at 1% to 1.7% of sales, and EPS is expected between $0 and $0.10 versus $0.55 a year ago. Q: What is the full-year fiscal 2026 outlook? A: CFO Christopher Work said the company will refrain from specific full-year earnings guidance given consumer pressures. Sales are now expected to be down low single digits, including a $12 million negative impact from closed stores. Consolidated product margin and gross margin are expected to be roughly flat, SG&A down slightly in total dollars, and operating margin down slightly versus prior expectations of 50 to 100 basis points of growth. The full-year effective tax rate is expected at roughly 55%. Q: What are the store opening, closing, and capital expenditure plans for fiscal 2026? A: CFO Christopher Work said Zumiez plans to open five new stores in fiscal 2026, all in the US, and close approximately 16 stores, including 10 in North America and 6 internationally. Capital expenditures are expected between $13 million and $15 million, depreciation and amortization excluding non-cash lease expense at approximately $19.2 million, and diluted share count at approximately 15.8 million shares, reflecting full execution of the $40 million repurchase program completed in early September. Q: What are the quarter-to-date sales trends through Labor Day? A: CFO Christopher Work said net sales for the 37-day period ended September 7, 2026 decreased 4.3% year over year, with comparable sales down 3.5% on top of a two-year stack of positive 21. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Image source: The Motley Fool. Thursday, Sept. 10, 2026 at 5:00 p.m. ET Chief Executive Officer - Richard Brooks Jr. Chief Financial Officer - Christopher Codington Work Operator: Good afternoon, ladies and gentlemen. And welcome to the Zumiez Inc. Second Quarter Fiscal 26 Earnings Conference Call. At this time, all participants are in a listen-only mode. We will conduct a question-and-answer session towards the end of this conference. Before we begin, I would like to remind everyone of the company's Safe Harbor language. Today's conference call includes comments concerning Zumiez Inc. 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 cause actual results to differ materially from the information that will be disclosed is available in Zumie's filings with the SEC. At this time, I would like to turn the call over to Rick Brooks, Chief Executive Officer. Mr. Brooks? Richard Brooks Jr.: Call. With me today is Christopher Codington Work, our Chief Financial Officer. The trends we are seeing so far in the third quarter before providing an update on our strategic priorities for the remainder of the year. Christopher will then take you through our financial results and along with our outlook for the third quarter. After that, we will open the call to your questions. Our second quarter sales decreased 2.5% from the prior year, While we are disappointed that results are short of expectations, due to softness in the US, encouraged by diversification of our global business where our international energy provided positive sales growth for the quarter. Our current quarter to date trends through Labor Day have shown similar results to the second quarter. The U.S. is trending down after very strong performance over the similar period in the 2 prior years, growing 14.1% in 2024 and 13.2% in 2025, while our international AEs have seen low single digit positive comparable sales in the same time frame this year, Current overall sales results have been meaningfully impacted by our U. S. Sales deceleration driven by softness in footwear, and an overall drop in transactions. We know from experience that these-- that these down cycles are generally temporary, and we are actively working to refine our merchandise assortments and further lean into our customer experience initiatives to improve the trajectory. As we move forward, we are executing on both our domestic and international strategies to continue advancing the business. First, domestically, we are evaluating all areas of the business to positively impact the customer through the important holiday cycle and into 2027. As we reflect on the U.S. business second quarter and back to school results, through Labor Day, the footwear category has been the most significant headwind accounting for 70% of the total US sales decline from the prior year through that time frame. Footwear has been challenged since the second quarter of 25, and the year over year comparisons get easier as we head into the fourth quarter of this year. We have also seen evolution in apparel trends that have positively driven the business for over 2 years. These changes created a sense of urgency to work with our brand partners as well as our own private label brands to bring newness and changes to our assortment. On the service front, we continue to invest in our-- with training focused on capturing every sale. We are learning-- we are learning more about our customers through our data initiatives, which are enhancing our ability to communicate with them in relevant ways to improve the effectiveness of marketing initiatives and evaluate where operational changes are needed in the business to enhance the customer experience. As we have said for some time, our job is to meet consumers where they are and continue to move with them in this important stage of their life. Identifying and leading on trends has been at the core of Zumiez's success throughout our history, and we have confidence that our teams will deliver as we move through this transitional period. Second, internationally, we remain focused on the key strategic priorities that have helped us improve the business dating back to the fourth quarter last year. This includes driving revenue through refreshing our product mix with innovative distinctive offerings, continued growth of private label that supplemented our branded product and resonate with our customers, while enhancing our margin profile, maintaining a rigorous commitment to profitability optimization in each market, This includes executing a premium pricing strategy to drive margin expansion, while managing expenses to grow at the bottom line. With the positive inflection in our sales, we are making traction on this initiative in each of the international markets. Lastly, we continue to maintain our solid financial foundation. Is the backbone of our ability to manage volatility funding initiatives aimed at serving our customer. Our financial position remains a source of real strength, giving us the flexibility to continue investing our strategic objectives while also delivering value to shareholders through our share repurchase program. Financial flexibility matters more than ever in a consumer environment where the speed of trend cycles has never been faster. And it underpins confidence in our ability to navigate whatever comes next while continuing to build long term shareholder value. Let me be clear, I am disappointed with our current results, and our people are working hard to improve the business. I have confidence in our team to make the changes needed to positively impact the fourth quarter and into 2027. Closing, I want to thank our entire organization for the continued hard work and dedication to our customers. It remains the foundation of everything we do. With that, let me hand things over to Christopher for the financial review. Christopher Codington Work: Thanks, Rick, and good afternoon, everyone. I am going to start with a review of our second quarter fiscal 26 results. I will then provide an update on our quarter to date sales trends before providing an outlook for the third quarter. Net sales for the second quarter of fiscal 26 decreased 2.5% to $209 million compared with $214 million in the second quarter of fiscal 25. Comparable sales were down 2.1% for the quarter. With Canada, Europe and Australia all having positive comparable sales growth for the quarter. The negative comp was driven by softness in the U.S., as Rick previously covered. The second quarter, North America net sales were $174 million a decrease of 3.4% from fiscal 25. Other international net sales, which consists of Europe and Australia, were $35.1 million up 2.5% from last year. Excluding the impact of foreign currency translation, North American net sales decreased 3.3%, other international net sales were up 0.8% year-over-year. Comparable sales for North America were down 2.9% while other international comparable sales increased 2.1% in the second quarter. From a category perspective, accessories was our largest positive comping category. Followed by men's. Footwear was our largest negative comping category followed by hard goods and women's. The consolidated decrease in comparable sales was driven by a decrease in transactions. Partially offset by an increase in dollars per transaction. Dollars per transaction were up for the quarter driven by an increase in units per transaction. Offset by a decrease in average unit retail. The second quarter gross profit decreased to $73.9 million compared to $76.1 million in the second quarter of last year. Gross margin was 35.3% of sales for the quarter compared with 35.5% in the second quarter of fiscal 25. The 20-basis-point decrease in gross margin was primarily driven by 60-basis-points of deleverage in store occupancy costs due to lower sales, partially offset by 50-basis-points of benefit from tariff refunds. SG&A expense for the second quarter of fiscal 26 was $75.2 million or 35.9% of net sales, compared with $75.9 million or 35.4% of net sales in fiscal 25. The 50-basis-point increase in SG&A as a percentage of net sales was driven by a 50-basis-point increase in non wage store operating costs, 40-basis-points of deleverage in store wages, on lower sales, 40-basis-points of deleverage related to nonstore wages, and 20-basis-points of deleverage in other corporate costs. This was partially offset by 70-basis-points of benefit related to lower annual incentive compensation, and 30-basis-points benefit related to a litigation settlement recorded in the second quarter of last year. Operating loss in the second quarter was $1.3 million or 0.6% of net sales, compared to a prior year operating income of $100 thousand or 0.1% of net sales. Net loss for the second quarter was $2.7 million or $0.17 per share. In the year ago period, we reported a net loss of $1 million or $0.06 per share. Our effective tax rate for the current quarter was -91.5% versus 210% a year ago. The unusual tax rates in the second quarter this year and last year were primarily due to the allocation of losses across the jurisdictions in which we operate. Lastly, due to our repurchase activity over the past 12 months, our share count is down approximately 6% since the second quarter last year. Which will positively benefit full year EPS, is a headwind in the quarters where we record a loss. Turning to the balance sheet. The business ended the quarter in a strong financial position. We had cash and current marketable securities of $97.3 million as of August 1, 2026, compared with a $107 million as of August 2, 2025. The decrease in cash and current marketable securities from the second quarter of last year was primarily driven by $34.5 million in share repurchase and $10.6 million of capital expenditures. Partially offset by $35.7 million in cash flow from operations. As of 08/01/2026, we have no debt on the balance sheet, and we continue to maintain our full $25 million unused credit facility. During the second quarter, we repurchased 1.2 million shares at a total cost of $23.2 million under the authorization provided by the Board of Directors on March 11, 2026. Year to date through the second quarter, we have repurchased a total of 1.5 million shares at a total cost of $29.5 million and ended the quarter with $157 million in inventory, compared with $158 million in inventory last year. On a constant currency basis, our inventory levels were down 0% from last year. We feel good about our current inventory position and the quality of our inventory on hand. Now to our third quarter to date results through Labor Day. Net sales for the 37-day period ended September 7th, 2030 decreased 4.3% compared to the 37-day period in the prior year ended September 8, 2030. Comparable sales for the 37-day period ended September 7th, 2030, were down 3.5% from the comparable period in the prior year. This was on top of a 2-year stack of positive 21.8%. From a regional perspective, net sales for North America business for the 37-day period ended September 7th, 2030, decreased 4.7% compared to the 37-day period ended September 8, 2030. While our other international business decreased 0.9%. Excluding the impact of foreign currency translation, North American net sales for the 37-day period ended September 7th, 2030, decreased 4.7% from the prior year,. While international net sales decreased 2% compared with 2025. Sales for North America decreased 3.9% for the 37-day period ended September 7th, 2030. Compared to the same weeks in the prior year. While comparable sales for our other international business increased 0.5%. From a category perspective, accessories was our only positive comping category, Footwear was our largest negative comping category, followed by women's, men's, and hardgoods. The consolidated decrease in comparable sales was driven by a decrease in transactions. Partially offset by an increase in dollars per transaction. Dollars per transaction were up for the period driven by an increase in units per transaction, partially offset by a decrease in average unit retail. With respect to our outlook for the third quarter of fiscal 26, I want to remind everyone that formulating our guidance involves some inherent uncertainty and complexity in estimated sales, product margin and earnings growth given a variety of internal and external factors that impact our performance. Given the softness in back to school results, we believe it is prudent to look forward with an appropriate level of conservatism. We are anticipating total sales to be between $222 million and $226 million for the 13 weeks ended October 31, 2026, Representing a decline in sales of 5.5% to 7%, compared to the prior year. Comparable sales are expected to be between -5% and -6.5%. For the third quarter, we are expecting product margin to be down 20- to 40-basis-points due to decline in our U. S. Business and a higher penetration of international sales that operate at a lower margin. Consolidated operating income for the third quarter is expected to be between 1% and 1.7% of sales, and we anticipate earnings per share will be between $0.00 and $0.10, compared to earnings per share of $0.55 in the prior year. Regarding our full fiscal 26, with the slowdown in our business and the increased consumer pressures we are observing, we believe caution is warranted when constraining our outlook for the full year. Given this, we will refrain from providing specific full year earnings guidance at this time, but we will provide some high level context around how we see the business. Aside from sales, we are currently seeing stronger results in our international business and softer results in our domestic business. Considering these trend lines in the business and inclusive of our third quarter guidance, we now believe sales will be down low single digits to the prior year. Which includes the $12 million of negative impact of closed stores. We believe consolidated product margin will be roughly flat to the prior year with growth internationally. While our domestic business will be down slightly. With the anticipated product margin, we believe gross margin will be roughly flat to the prior year as a percent of sales. SG&A is expected to be down slightly in total dollars on lower levels of incentive compensation and deleverage with sales down to the prior year. Operating margin with the previously mentioned assumptions and barring significant deterioration in the consumer environment, we now believe operating margin will be down slightly in fiscal 26. Compared to previously communicated levels of 50 to 100 basis points of growth. While effective tax rates will fluctuate by quarter, we anticipate that our full year effective tax rate will be roughly 55% in fiscal 26. Compared to an effective tax rate of 44% in fiscal 25. We are planning to open 5 new stores in fiscal 26 all within the US. We plan to close approximately 16 stores during fiscal 26, including 10 in North America and 6 internationally. We expect our capital expenditures for fiscal 26 to be between $13 million and $15 million. We expect the depreciation and amortization, excluding noncash lease expense, will be approximately $19.2 million down from $21.3 million in fiscal 25. And we are currently projecting our diluted share count for the full year to be approximately 15.8 million shares. This share count does contemplate full execution of the $40 million repurchase program, approved by the board on March 11, 2026 which was officially completed in early September. Our strong financial position, and proven ability to execute gives us confidence in our ability to navigate the current environment, while continuing to invest in our long term strategic priorities. With that, operator, we would like to open the call up for questions. Operator: Certainly. Ladies and gentlemen, if you do have a question at this time, please press 1-1 on your telephone. If your question has been answered and you would like to remove yourself from the queue, simply press 1-1. Our first question comes from the line of Mitchel Kummetz from Seaport. Your question, please. Mitchel Kummetz: Yes. Thanks for taking my questions. Rick, I was hoping to just get your take on what is happening in footwear. Number of retailers have already reported. Not necessarily maybe the most direct competitors of yours, there is been talk about weakness in legacy silhouettes. there is also been some talk about maybe a shift away from athletic to nonathletic. I do not know to what extent you are seeing some of that, and how are you sort of planning to kind of pivot the assortment so that you are bedroom better aligned with any sort of strength that might be in footwear right now? Richard Brooks Jr.: Yeah. I mean, thank you, Mitchel. I think we are clearly seeing that it is been a challenge for us for quite a number of quarters now as we said. And it is I think we are aligned around the idea that we are selling lifestyle athletic footwear. So it is been, I think, we are in a kind of sweet spot. it is really been struggling. In terms of just, again, what our mix of products has always said. So as we look at this niche, as we look forward, we are certainly trying a lot of different things. We have some things that are working, to offset, but it is not working at a level that is able to deal with the big brands that are trending down. So our goal looking forward as you look into the back half this year and the next year is to continue to try and work with our partners continue to drive uniqueness into the footwear into our footwear business. that is where we really see that we can have-- we can have success. Now that is going to be easier for us to see, Mitchel, because we are gonna I really feel we are gonna find the bottom of this cycle here as we anniversary these big negative comps In Q4. So I think it is as usual for us. it is going to be about uniqueness of product and then finding that next trend brand that is really going to drive us forward. Mitchel Kummetz: Yeah. And there is also been a lot of talk amongst some of these retailers that this has been a particularly promotional back to school season around footwear, and I am just wondering how are you guys addressing that And to what extent is that putting pressure on your margins? If to the extent that you have to compete with some of those promotions? Richard Brooks Jr.: Yeah. Good question, Mitchel. And first, let me say I think we feel pretty good about our position, our inventory position in footwear. We have been working closely because this has been with our partners over the last few quarters really to manage what our inventory exposure is here. So again, appreciate our partners support here. And I think I do not think we have a lot of risk around our inventory position mix So we have not been as promotional as I think some of our competitors have been on price point. That said, we are, as you can see on our website, we are certainly trying to clear some footwear out. And it is, impacted margins some in within these quarters. So I think we do not have a major inventory problem. We are having to deal with some of the issues left in terms of margin impact. Mitchel Kummetz: Okay. And then maybe last 1 for me. As far as the third quarter, comp outlook is concerned, the range that you have provided is I guess, I would say worse than what you are seeing quarter to date. Maybe 2 questions. How much of the quarter is essentially in the books through September 7th? And the expectation for that comp to deteriorate over the balance of the quarter How much of that is just sort of conservatism that you have baked into your guide versus just the thought that the pattern that we have been in for a while, the consumer of disappears in between events. And once we get through back to school, there is not a whole lot that might be, you know, com compelling reason to shop over the balance of the quarter? Christopher Codington Work: Yeah. Thanks, Mitchel. I will go ahead and take that. You know, I think you kind of hit on the 2 points we tried to factor into the guide. We are just over 50% of the way through from a sales in perspective. And as you can tell with the guide that is worse than where we are trending, we are expecting the back half of the quarter to be worse than what we experienced through back to school. That would be consistent with what we have seen the last at least the last couple years, but actually for number of years. Where we have just performed much stronger in the back to school time period. And then when there is less of a reason to shop, it is slow, And we are also baked some conservatism in. The-- the second quarter, as you as you noted, was a miss. Where we thought the second quarter was going to come in. And we have identified that some of the trends that have really been driving this business, have moved pretty quickly. And so we are-- we are really focused on how to impact the fourth quarter and into 2027. And in those cycles, what we have learned in the past is when trends move, they move. And so we are trying to be cautious in how we are planning the rest of the quarter. And, you know, hopefully, we can come back to you here in early December and talk about how we were able to outperform this. Mitchel Kummetz: Thank you, and best of luck. Richard Brooks Jr.: Thanks. Thanks, Mitchel. Operator: Thank you. Once again, if you have a question. This does conclude the question-and-answer session of today's program. I would like to hand the program back to Rick Brooks for any further remarks. Richard Brooks Jr.: All right. As always, I just want to thank everyone for their interest in Zumiez, and we will look forward to talking to you in December with our third quarter results. Thank you, everybody. Operator: Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day. 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This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Zumiez (ZUMZ) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Zumiez Inc. ZUMZ reported second-quarter fiscal 2026 results, wherein the top line missed the Zacks Consensus Estimate and declined year over year, while the bottom line also missed the same. Zumiez posted a loss of 17 cents per share, wider than the year-ago loss of 6 cents and the Zacks Consensus Estimate of a loss of 14 cents. The bottom line missed the consensus mark by 21.4%. Net sales declined 2.5% year over year to $209 million from $214.3 million and missed the consensus estimate of $212 million by 1.4%. U.S. weakness, particularly in footwear and customer traffic, weighed on results. Inventory was $157.3 million compared with $157.7 million a year ago. Zumiez Inc. price-consensus-eps-surprise-chart | Zumiez Inc. Quote Second-quarter net sales were $209 million, down from $214.3 million in the year-ago quarter. Management attributed the decline primarily to weaker performance in the United States, while growth across international markets partly cushioned the pressure. The consolidated sales decline was due to fewer transactions. Dollars per transaction increased from the prior-year period as higher units per transaction more than offset a decrease in average unit retail. Management said that footwear remained the most significant headwind in the U.S. business. Accessories was the strongest positive-performing merchandise category during the quarter, followed by men's. Footwear was the largest negative-performing category, followed by hardgoods and women's merchandise. Management said that footwear has been challenged since the second quarter of fiscal 2025. During the second quarter and back-to-school periods of fiscal 2026, footwear accounted for 70% of the total U.S. sales decline from the comparable prior-year period. Zumiez is working with brand partners and its private-label portfolio to introduce more differentiated merchandise. Gross profit declined 2.9% to $73.9 million from $76 million in the second quarter of fiscal 2025. Gross margin narrowed 20 basis points to 35.3% from 35.5% in the prior-year quarter. The margin contraction reflected 60 basis points of deleverage in store occupancy costs due to lower sales. This was partly offset by a 50-basis-point benefit from tariff refunds. The year-over-year comparison underscores the impact of softer sales volumes on fixed store costs. SG&A expenses decreased 1% to $75.2 million from $75.9 million a year earlier. However, SG&A expenses increased to 35.9% of sales from 35.4% in the prior-year period as weaker revenues reduced expense leverage. ZUMZ recorded an operating loss of $1.3 million against operating income of $0.1 million a year ago. For the first six months of fiscal 2026, net sales increased 0.9% to $402.3 million from $398.6 million in the first six months of fiscal 2025. Gross profit rose 2.9% to $135.2 million from $131.3 million, while gross margin improved to 33.6% from 32.9%. The six-month operating loss narrowed to $16.5 million from $19.8 million. However, net loss widened to $16 million from $15.3 million, while loss per share increased to $1 from 88 cents in the year-ago period. Cash and current marketable securities totaled $97.3 million as of Aug. 1, 2026, down from $106.7 million as of Aug. 2, 2025. Total shareholders' equity was $279 million compared with $292.4 million a year earlier. Inventory decreased to $157.3 million from $157.7 million in the prior-year period. For the first six months, cash used for common-stock repurchases totaled $29.5 million compared with $32.7 million a year ago. For the third quarter of fiscal 2026, Zumiez expects earnings per share between breakeven and 10 cents. This compares with earnings of 55 cents per share in the third quarter of fiscal 2025, reflecting management's cautious stance following weaker back-to-school trends. For fiscal 2026, the company expects depreciation and amortization, excluding non-cash lease expense, to be about $19.2 million compared with $21.3 million in fiscal 2025. Shares of this Zacks Rank #4 (Sell) company have lost 9.2% over the past three months compared with the industry’s decline of 14.3%. Image Source: Zacks Investment Research Some better-ranked stocks have been discussed below: FIGS, Inc. FIGS operates as a direct-to-consumer healthcare apparel and lifestyle company in the United States and internationally. At present, FIGS carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. The Zacks Consensus Estimate for FIGS’s current fiscal-year sales and earnings implies growth of 18.2% and 89.5%, respectively, from the year-ago figures. FIGS has delivered a trailing four-quarter earnings surprise of 201.8%, on average. Fossil Group, Inc. FOSL designs, develops, markets, and distributes consumer fashion accessories in the United States, Europe, Asia, and internationally. At present, FOSL carries a Zacks Rank of 2. The Zacks Consensus Estimate for FOSL’s current fiscal-year sales indicates a decline of 4%, while the same for earnings indicates growth of 96.7% from the year-ago figures. FOSL delivered a trailing four-quarter negative earnings surprise of 236.2%, on average. Boot Barn Holdings, Inc. BOOT operates specialty retail stores in the United States and internationally. At present, Boot Barn carries a Zacks Rank of 2. The consensus estimate for Boot Barn’s current fiscal-year sales and earnings implies growth of 15.7% and 22.6%, respectively, from the year-ago figures. BOOT delivered a trailing four-quarter earnings surprise of 11.4%, on average. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Zumiez Inc. (ZUMZ) : Free Stock Analysis Report Boot Barn Holdings, Inc. (BOOT) : Free Stock Analysis Report Fossil Group, Inc. (FOSL) : Free Stock Analysis Report FIGS, Inc. (FIGS) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Interested in Zumiez Inc.? Here are five stocks we like better. Second-quarter performance weakened: Sales fell 2.5% to $209 million, comparable sales declined 2.1%, and the net loss widened to $2.7 million as U.S. weakness—especially in footwear—outweighed growth in Europe and Australia. Footwear remains the main challenge: The category represented 70% of Zumiez’s U.S. sales decline through Labor Day. The company is working with brand partners to introduce more distinctive products while managing inventory and clearing some merchandise. Outlook turned more cautious: Zumiez expects third-quarter sales to decline 5.5%–7% and EPS to range from breakeven to $0.10, while full-year sales are now projected to decline by low single digits. The company completed its $40 million buyback program and plans to close about 16 stores during fiscal 2026. Is Abercrombie & Fitch Stock's Next Stop $40 or $20? Zumiez (NASDAQ:ZUMZ) reported lower second-quarter sales and a wider net loss as softness in its U.S. business, particularly in footwear, outweighed positive comparable-sales growth in its international operations. Net sales for the second quarter of fiscal 2026 declined 2.5% to $209 million from $214.3 million a year earlier. Comparable sales fell 2.1%, driven by a 2.9% decline in North American comparable sales, while comparable sales in Europe and Australia increased 2.1%. → Morgan Stanley Eyes Good Things Ahead for Meta After $18 Billion Legal Settlement 3 Small-Cap Stocks With Big Catalysts Chief Executive Officer Rick Brooks said the company was disappointed that results fell short of expectations, but noted that its international entities produced positive sales growth during the quarter. He said current trends through Labor Day remained broadly similar to the second quarter, with the U.S. business declining and international markets generating low-single-digit positive comparable sales. Brooks identified footwear as the primary pressure on the domestic business. Through Labor Day, footwear accounted for 70% of Zumiez's total U.S. sales decline from the prior year, he said. The category has been challenged since the second quarter of fiscal 2025, though comparisons are expected to become easier in the fourth quarter. → Tesla’s Robotaxi Launch Wasn’t the Moment Investors Expected Is The Bottom In For Zumiez, Inc? In the second quarter, accessories was the company's largest positive comparable-sales category, followed by men's. Footwear was the largest negative category, followed by hard goods and women's. Brooks said Zumiez primarily sells lifestyle athletic footwear, an area that has been under pressure. The company is working with brand partners to add more distinctive merchandise and identify emerging trend brands that could support future growth. → Despite Post-Earnings Drop, Wall Street Analysts Eye New Highs for Broadcom Stock “Our goal looking forward as we look into the back half of this year into next year is to continue to try and work with our partners, continue to drive uniqueness into our footwear business,” Brooks said in response to an analyst question. The company said it has managed footwear inventory closely with its partners and does not believe it has a major inventory issue. While Zumiez has not been as promotional as some competitors, Brooks said the company is clearing some footwear inventory and that this has affected margins to some extent. Second-quarter gross profit declined to $73.9 million from $76.1 million in the prior-year period. Gross margin was 35.3% of sales, down 20 basis points from 35.5% a year earlier. The decline reflected 60 basis points of deleverage in store occupancy costs due to lower sales, partially offset by a 50-basis-point benefit from tariff refunds. Selling, general and administrative expense was $75.2 million, or 35.9% of sales, compared with $75.9 million, or 35.4% of sales, a year earlier. The increase as a percentage of sales reflected higher store operating costs and deleverage in store and non-store wages, partially offset by lower annual incentive compensation. Zumiez reported an operating loss of $1.3 million, compared with operating income of $100,000 in the prior-year quarter. Net loss widened to $2.7 million, or 17 cents per share, from a loss of $1 million, or 6 cents per share, a year earlier. Chief Financial Officer Chris Work said the company's share count was down about 6% from a year earlier due to repurchases over the preceding 12 months. While that reduction is expected to benefit full-year earnings per share, it can create a headwind in quarters where the company posts a loss. Zumiez ended the quarter with $97.3 million in cash and current marketable securities, down from $106.7 million a year earlier. The decline was primarily attributable to $34.5 million in share repurchases and $10.6 million in capital expenditures, partly offset by $35.7 million in operating cash flow. The company had no debt and retained its full $25 million unused credit facility as of Aug. 1. Inventory totaled $157.3 million, essentially flat with $157.7 million a year earlier; on a constant-currency basis, inventory was down 0.6%. During the second quarter, Zumiez repurchased 1.2 million shares for $23.2 million. Through the first half, it repurchased 1.5 million shares for $29.5 million. Work said the $40 million repurchase program authorized in March was completed in early September. For the 37 days ended Sept. 7, net sales decreased 4.3% from the comparable period a year earlier, while comparable sales declined 3.5%. North American comparable sales fell 3.9%, while comparable sales in Europe and Australia increased 0.5%. Accessories was the only category with positive comparable sales during the period. Footwear remained the largest negative category, followed by women's, men's and hard goods. Zumiez expects third-quarter sales of $222 million to $226 million for the 13 weeks ending Oct. 31, representing a year-over-year decline of 5.5% to 7%. Comparable sales are forecast to decline 5% to 6.5%. The company expects operating income of 1% to 1.7% of sales and earnings per share between breakeven and 10 cents, compared with 55 cents a year earlier. Work said the guidance assumes conditions will weaken following the back-to-school period, consistent with historical patterns in which sales slow when customers have fewer reasons to shop. He also said the company incorporated greater conservatism after second-quarter results missed its expectations. Fiscal 2026 sales are now expected to decline by low single digits, including a $12 million impact from closed stores. Product margin and gross margin are expected to be roughly flat as a percentage of sales for the full year. Operating margin is expected to decline slightly, versus prior expectations for 50 to 100 basis points of growth. Zumiez plans to open five U.S. stores and close about 16 stores during fiscal 2026, including 10 in North America and six internationally. Capital expenditures are expected to total $13 million to $15 million. Brooks said the company is refining its merchandise assortment, investing in employee training and using customer data to improve marketing and operational decisions. He said management remains focused on actions intended to improve results in the fourth quarter and fiscal 2027. Zumiez, Inc (NASDAQ: ZUMZ) is a specialty retailer offering apparel, footwear, accessories and hardgoods targeted at the action-sports lifestyle market. With a focus on skateboarding, snowboarding, BMX and streetwear, the company stocks a mix of leading third-party brands—such as Vans, Nike SB, DC Shoes and The North Face—alongside proprietary private-label merchandise. In addition to traditional fashion items, Zumiez stores carry hardware and equipment tailored to board sports, supporting both amateur and enthusiast consumers. Originally founded in 1978 in Seattle, Washington, by Tom Campion, Gary Haakenson and Steve Brosvik, Zumiez opened its first branded retail location in 1988. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Zumiez Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for September 2026.

LYNNWOOD, Wash., Sept. 10, 2026 (GLOBE NEWSWIRE) -- Zumiez Inc. (NASDAQ: ZUMZ) a leading specialty retailer of apparel, footwear, equipment and accessories for young men and women, today reported results for the second quarter ended August 1, 2026. Net sales for the second quarter ended August 1, 2026 (13 weeks) decreased 2.5% to $209.0 million from $214.3 million in the second quarter ended August 2, 2025 (13 weeks). Comparable sales for the thirteen weeks ended August 1, 2026, decreased 2.1%. Net loss in the second quarter of fiscal 2026 was $2.7 million, or $0.17 per share, compared to a net loss of $1.0 million, or $0.06 per share, in the second quarter of the prior fiscal year. Total net sales for the six months (26 weeks) ending August 1, 2026 increased 0.9% to $402.3 million from $398.6 million reported for the six months (26 weeks) ending August 2, 2025. Comparable sales increased 0.7% for the twenty-six weeks ended August 1, 2026. Net loss for the first six months of fiscal 2026 was $16.0 million, or $1.00 per share, compared to a net loss for the first six months of fiscal 2025 of $15.3 million, or $0.88 per share. On August 1, 2026, the Company had cash and current marketable securities of $97.3 million compared to cash and current marketable securities of $106.7 million on August 2, 2025. The decrease was primarily driven by $34.5 million related to share repurchases and $10.6 million of capital expenditures partially offset by $35.7 million of cash flow from operations. The Company repurchased 1.2 million shares during the second quarter of 2026 at an average cost including commission of $19.30 per share and a total cost of $23.2 million. Fiscal year-to-date through August 1, 2026, the Company has repurchased 1.5 million shares at an average cost including commission of $20.07 per share and a total cost of $29.5 million. "Second quarter results came in below last year driven by weaker performance in the U.S., which was primarily driven by continued softness in footwear as well as lower traffic levels," said Rick Brooks, Chief Executive Officer of Zumiez Inc. "The decline in the U.S. business was partially offset by continued growth across our other regions, underscoring the strength and diversification of our global business. Our back-to-school trend was similar to our second quarter results with the U.S. being our toughest performing market after two years of low double digit comparable store sales growth for the same periods, partially offset by comparable sales gains internationally. As we look forward to the holiday season, we remain focused on refining our merchandise assortments and deepening our customer experience initiatives to improve the trajectory." Third Quarter To-Date Third quarter-to-date net sales for the 37 days ending September 7, 2026, decreased 4.3%, compared with the 37-day period in the prior year ending September 8, 2025. Comparable sales over the same period are down 3.5%. Fiscal 2026 Third Quarter Outlook The Company is introducing guidance for the three months ending October 31, 2026. Net sales are projected to be in the range of $222 to $226 million. Earnings per share are expected to be between $0.00 and $0.10. In fiscal 2026 the Company currently intends to open approximately 5 new stores all located in North America and close roughly 16 stores, including 10 in North America and 6 internationally. Conference call Information To access the conference call, please pre-register using this link (Registration Link). Registrants will receive confirmation with dial-in details. The conference call will also be available to interested parties through a live webcast at https://ir.zumiez.com. To avoid delays, we encourage participants to dial into the conference call fifteen minutes ahead of the scheduled start time. A replay of the webcast will also be available for a limited time at https://ir.zumiez.com. About Zumiez Inc. Zumiez is a leading specialty retailer of apparel, footwear, accessories and hardgoods for young men and women who want to express their individuality through the fashion, music, art and culture of action sports, streetwear, and other unique lifestyles. As of August 29, 2026, we operated 714 stores, including 561 in the United States, 45 in Canada, 81 in Europe and 27 in Australia. We operate under the names Zumiez, Blue Tomato and Fast Times. Additionally, we operate ecommerce web sites at zumiez.com, zumiez.ca, blue-tomato.com and fasttimes.com.au. Safe Harbor Statement Certain statements in this press release and oral statements relating thereto made from time to time by representatives of the Company may constitute forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. These statements include, without limitation, predictions and guidance relating to the Company's future financial performance, brand and product category diversity, ability to adjust product mix, integration of acquired businesses, growing customer demand for our products and new store openings. In some cases, you can identify forward-looking statements by terminology such as, "may," "should," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "potential," "continue," or the negative of these terms or other comparable terminology. These forward-looking statements are based on management's current expectations, but they involve a number of risks and uncertainties. Actual results and the timing of events could differ materially from those anticipated in the forward-looking statements as a result of risks and uncertainties, which include, without limitation, those described in the Company’s annual report on Form 10-K for the fiscal year ended February 1, 2025 as filed with the Securities and Exchange Commission and available at www.sec.gov. You are urged to consider these factors carefully in evaluating the forward-looking statements herein and are cautioned not to place undue reliance on such forward-looking statements, which are qualified in their entirety by this cautionary statement. The forward-looking statements speak only as of the date on which they are made, and the Company undertakes no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances. Company Contact:Darin WhiteDirector of Finance & Investor RelationsZumiez Inc.(425) 551-1500, ext. 1337 Investor Contact:ICRBrendon Frey (203) 682-8200