In its Q1 ended May 1, Zumiez, the U.S. action sports retailer whose assets include Blue Tomato in Europe, beat financial analysts’ forecasts, increasing its global sales 102.6 percent to $279.1 million. This resulted in a net profit of $26.4 million for the quarter, compared to a net loss of $21.1 million in the same period last year. Turnover also increased by 31.1 percent compared to the first quarter of 2019.
Progress was particularly strong in the U.S., where its stores were open 94 percent of potential operating days, and the company benefited from government financial incentives. Here, Zumiez’s quarterly sales of $248.7 million were 113 percent higher than the same period last year and 32 percent higher than the first quarter of 2019.
With the company’s European and Canadian stores open only 40 percent and 77 percent of normal operating days, respectively, Zumiez’s international sales increased 43 percent to $30.4 million in the latest quarter, up 30 percent in local currencies and 22 percent compared to 2019.
Gross margin improved 19.8 percentage points to 37.0 percent for the quarter, including a 3.9 percent increase in product margins. Still, most of the improvement came from leverage in occupancy costs as the channel mix returned to historical levels. The operating margin increased 7.9 percentage points to 20.2 percent.
The company forecasts gross margins to improve for the remainder of the year, with sales expected to grow in the low to mid-teens compared to 2019. For the four weeks ended May 29, total sales were 42 percent higher than last year and 31 percent higher than the same period in 2019.