Zumiez, Inc. (NASDAQ:ZUMZ) Q3 2019 Earnings Conference Call - Final Transcript

Dec 05, 2019 • 05:00 pm ET


Zumiez, Inc. (NASDAQ:ZUMZ) Q3 2019 Earnings Conference Call - Final Transcript


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Good afternoon, ladies and gentlemen, and welcome to the Zumiez Inc. Third Quarter Fiscal 2019 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'd 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 factors that could cause actual results to differ materially from the information that will be discussed, is available in Zumiez's filing with the SEC.

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

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 our third quarter and holiday 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 up the call to your questions.

The third quarter, represented our fourth consecutive strong back-to-school season and the 13th quarter of positive comparable sales gains. We drove solid full price selling in each of our geographies, resulting in a comparable sales increase of 5.5% versus our guidance of 2% to 4%. This comes on top of a 4.8% gain a year ago and 7.9% gain, a year before that.

We're very pleased with our performance and our team's meticulous focus on providing high quality service to the customer through every touch point. It is this focus has allowed us to convert mid single-digit topline growth into a significant improvement in profitability. The sales gains coupled with gross margin expansion, and the benefits from numerous expense saving initiatives we've implemented throughout our organization, drove a 37.1% increase in earnings per share to $0.75, which is $0.14 above the high end of our guidance range.

Our relentless attention to serving our customers, combined with a powerful operating model, we built around the single cost structure, has fueled our strong track record of performance and has Zumiez well positioned for continued success. This includes the fourth quarter, which has started well with quarter-to-date comparable sales measured through Tuesday, December 3rd, 2019, increasing 3.3% compared to the same period last year ending Tuesday December 4th, 2018.

As we reflect upon the strong results in the first nine months and full Year outlook, we reminded that our short-term results are directly attributed to the execution of our long-term strategies. For Zumiez, our long-term focus remains squarely on continuing to execute the customer centric growth strategy that the company has been building and evolving over its 40-year history. Many of the key elements of