Zumiez, Inc. (NASDAQ:ZUMZ) Q2 2019 Earnings Conference Call Transcript

Sep 05, 2019 • 05:00 pm ET

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Zumiez, Inc. (NASDAQ:ZUMZ) Q2 2019 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good afternoon, ladies and gentlemen, and welcome to the Zumiez Incorporated Second Quarter Fiscal 2019 Earnings Conference Call. [Operator Instructions]

Before we begin, I'd like to remind everyone of the Company's safe harbor language. Today's conference call includes comments concerning Zumiez Incorporated business outlook and contains forward-looking statements. These forward-looking statements and all other statements that may be 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 factors that could cause actual results to differ materially from the information that will be discussed is available in Zumiez' filing with the SEC.

At this time, I will turn the call over to Rick Brooks, Chief Executive Officer. Please go ahead, sir.

Executive
Richard M. Brooks

Hello, and thank you everyone for joining us on the call. With me today is Chris Work, our Chief Financial Officer.

I'll begin today's call with a few brief remarks regarding second quarter and back-to-school performance to-date, then I'll share some thoughts about the future before handing the call to Chris, who will take you through the numbers. After that, we'll open the call, up to your questions. We continue to be very pleased with the performance of the business as both top and bottom line results exceeded expectations. Comparable sales increased 3.6% in the second quarter versus our outlook of flat to 2% marking our 12th consecutive quarter of positive comparable sales. On a two-year and three-year stack basis, second quarter comps are up 9.9% and 14.6% respectively.

Our relentless attention to serving our customers continues to fuel strong, full price selling, which combined with a powerful operating model we built around the single cost structure and a steadfast focus on long-term strategy has translated into a significant improvement in profitability. Second quarter earnings per share more than doubled year-over-year to $0.36 from $0.17, which was $0.16 above the high end of our guidance range. As we moved into the third quarter, our momentum has accelerated with 7.1% comparable sales growth in August. This is on top of 9.5% in the year-ago period and represents our fourth consecutive back-to-school season with strong comparable sales in the business.

Our performance is a testament to our team's ability to consistently execute our consumer-centric growth strategy. It is the key elements of this strategy that we believe has separated us from the competition and will continue to distinguish Zumiez as a clear winner in the future of retail.

Before I hand the call over to Chris for the numbers, let me dig into those key elements. It starts with having the right products and brands that our customers are looking for made up of a distinct mix of leading and emerging brands that are not broadly distributed. We've been able to consistently achieve this balance through the strong relations we forward with our brand partners and more recently our global reach that allows us to serve both our customers and brand partners at heightened levels.