Zumiez posts lower 1Q income as costs increase

Zumiez 1st-quarter income falls by almost half on charges from Blue Tomato acquisition

Associated Press

LYNNWOOD, Wash. (AP) -- Zumiez Inc. said Thursday that its net income fell 45 percent in the fiscal first quarter on greater costs related to its acquisition of sports retailer Blue Tomato.

Zumiez sells surf- and skate-themed clothing, footwear, equipment and accessories. The company said its income fell by almost half because it took $1.7 million in charges related to the Blue Tomato deal. The $75.5 million deal expanded Zumiez into Europe, and in last year's quarter Zumiez took $400,000, or a penny per share, in related charges.

The company said its net income fell to $2.5 million, or 8 cents per share, from $4.5 million, or 14 cents per share. The one-time charges reduced its income by 5 cents per share. Revenue rose 14 percent, to $148.5 million from $129.9 million.

FactSet says analysts expected Zumiez to report net income of 11 cents per share and $147.1 million in revenue for the quarter ended May 4.

Sales at locations open at least a year fell 0.7 percent. Those sales are considered an important measurement of retailer health because they leave out results from stores that have opened or closed within the last year.

Analysts expected a decline of 1.8 percent on average.

The company said the full-price sales in March and April were strong even though business conditions were more difficult compared with a year ago.

Zumiez said it expects net income of 12 to 14 cents per share in the second quarter, including 4 cents per share in one-time charges, and $155 million to $158 million in revenue. It said sales at stores open could be unchanged or could rise as much as 2 percent.

Analysts had forecast net income of 17 cents per share and $156.9 million in revenue, and expected sales at locations open at least a year to grow 1.8 percent.

Shares of Zumiez fell 19 cents to $32 on Thursday, and lost $1.18, or 3.7 percent, to $30.82 in after-hours trading.

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