Zumiez Q3 sales down 17.9 percent

US skate shop and streetwear retailer Zumiez has reported a 17.9 percent drop in sales in the third quarter as it faced multiple headwinds affecting the wider industry.

In the three months to October 29, sales fell to 237.6 million dollars from 289.5 million dollars a year earlier, while net income slumped to 6.9 million dollars from 30.7 million dollars.

Chief executive Rick Brooks said the results were negatively impacted by various factors, including a pullback in consumer discretionary spending, inflation driven cost and expense pressures, an increasingly promotional marketplace, the war in Ukraine, and “the anniversary of some strong trends that drove our business during the pandemic”.

Additionally, the company’s growth in Europe and Australia were offset on a reported basis by unfavorable movements in foreign currency.

“While we are disappointed with the change in our results year-over-year, I am encouraged with how our teams are managing the business in light of the current challenges,” Brooks said.

Fourth quarter outlook

Looking at more recent trading for the current quarter to date, sales fell 23.9 percent to November 29.

Zumiez now expects net sales for the fourth quarter to come in at between 258 million dollars and 265 million dollars, and earnings per diluted share of between 0.36 dollars and 0.51 dollars.

Brooks continued: “Like we have done during similar economic times, we are prudently balancing the protection of near-term profitability while investing in our people and the key projects that will continue to deliver our distinct merchandise and world-class customer service that has been the foundation of Zumiez’ long-term success.”

Zumiez plans to open approximately 33 new stores in fiscal 2022, including up to 16 stores in North America, 13 stores in Europe, and four stores in Australia.