Zumiez (NASDAQ:ZUMZ) management told investors its fourth quarter fiscal 2025 performance capped a “successful holiday season” and marked a second consecutive year of progress, driven by full-price selling and margin expansion in both North America and Europe.
Fourth quarter results: sales up, margins expand
Chief Executive Officer Rick Brooks said the quarter was highlighted by “robust full price selling” in North America during the holiday period, which helped generate mid-single-digit comparable sales growth in the region and “meaningful” gross margin expansion. Brooks also pointed to a sharp improvement in Europe’s product margins, saying work on assortment and full-price selling drove a 660 basis point year-over-year product margin improvement.
Comparable sales in North America increased 5.5%, marking the region’s eighth consecutive quarter of comparable sales growth, while other international comparable sales declined 7.5%.
Work said the company’s consolidated comparable sales increase was driven by higher dollars per transaction, partially offset by fewer transactions. He attributed the higher dollars per transaction to an increase in average unit retail and an increase in units per transaction.
Gross margin was 38.2% of sales, up from 36.2% a year earlier. Work said the 200 basis point increase was primarily driven by 180 basis points of product margin improvement and 50 basis points of leverage in store occupancy costs due to higher sales and the closure of underperforming stores, partially offset by 20 basis points related to higher incentive costs.
Operating income was $25.0 million, or 8.6% of sales, compared with $20.1 million, or 7.2% of sales, a year earlier. Net income was $19.6 million, or $1.16 per share, compared with $14.8 million, or $0.78 per share, in the prior-year quarter.
Category and regional performance
Management described strength across several categories during the holiday period. Brooks said men’s led positive comparable sales growth, followed by women’s, accessories, and hardgoods, which he said validated merchandising investments in “product newness” and private label expansion.
Work added that footwear was the only negative comping category in the fourth quarter. For the full year, women’s was the largest positive comping category, followed by men’s, hardgoods, and accessories, with footwear again the only negative comping category.
Full-year 2025: comps rise, EPS turns positive
For fiscal 2025, net sales increased 4.5% to $929.1 million and comparable sales rose 4.3%, building on a 4% comparable sales increase in 2024, according to Brooks. He said the company generated positive comparable sales every quarter, ranging from low single digits to high single digits.
Work reported North America net sales increased 5.1% to $757.0 million, while other international net sales rose 1.7% to $172.0 million. Excluding foreign currency translation, other international net sales declined 4.2% year over year. Comparable sales were up 6.7% in North America and down 5.4% internationally for the year.
Gross margin for the year improved to 35.8% from 34.1%. Work said the 170 basis point increase was driven by 90 basis points of product margin improvement and 70 basis points of leverage in occupancy costs from higher sales and store closures.
Operating income rose to $17.0 million, or 1.8% of sales, compared with $2.0 million, or 0.2% of sales, a year earlier. Net income was $13.4 million, or $0.78 per share, compared with a net loss of $1.7 million, or $0.09 per share, in fiscal 2024. Work noted fiscal 2025 results were negatively impacted by approximately $0.15 per diluted share from a wage-and-hour litigation settlement in California.
Private label growth and strategic priorities
Brooks said the company is focused on three strategic priorities entering fiscal 2026: driving revenue through consumer-focused initiatives, optimizing profitability across geographies, and leveraging its financial position to manage volatility while funding strategic expansion.
He highlighted product “newness” and private label as major contributors. Brooks said the company launched more than 150 new and emerging brands in 2025, and private label penetration reached a company record at approximately 30% of sales, up from 12% five years ago.
In response to an analyst question, Brooks said he did not see “any major changes” in holiday performance trends between private label and branded product, noting that private label and branded assortments often address different parts of the business. He added that new brands have performed well on the branded side, while private label is more concentrated in pants, with branded strength more associated with areas like T-shirts, fleece, and hats.
Balance sheet, buybacks, and early 2026 trends
Work said the company ended the year with cash and current marketable securities of $160.6 million as of January 31, 2026, up from $147.6 million a year earlier, and with no debt. He attributed the increase primarily to $53.5 million in operating cash flow, foreign currency benefits, and the release of restricted cash, partially offset by share repurchases and capital expenditures.
Zumiez repurchased 2.7 million shares in fiscal 2025 at an average cost of $14.18 per share, totaling $38.3 million. Work also said the board approved a new authorization on March 11, 2026, to repurchase up to $40 million of common stock through January 29, 2028, superseding a prior authorization.
Inventory ended the year at $147.0 million, compared with $146.6 million a year earlier; on a constant-currency basis, Work said inventory was down 3.8% and management felt “good” about the position.
Turning to fiscal 2026, Work said total sales for the four-week period ended February 28, 2026 increased 9.8% year over year, with comparable sales up 7.5%. North America comparable sales were up 6.0% and other international comparable sales were up 13.2% in that period.
In the Q&A, Work said the strong early-year international performance was “all driven by Europe,” citing progress from a strategic shift begun in late 2024 focused on slowing growth to prioritize profitability and cash flow, including assortment changes, inventory management, full-price selling, expense control, and personnel changes. Brooks added that Europe’s fourth quarter results occurred against what he described as “one of our worst snow years ever” in a region where the company has a “very dominant position” in snow retailing.
For the first quarter ending May 2, 2026, Work guided to total sales of $189 million to $193 million (up 3% to 5%) and comparable sales of 2% to 4%. The company expects an operating loss of $15.6 million to $17.8 million, compared with a $19.9 million loss in the prior year, with the improvement including product margin expansion and the benefit of lapping a $2.9 million one-time litigation settlement incurred in the first quarter of 2025. Zumiez guided to a loss per share of $0.77 to $0.87, versus a loss of $0.79 in the prior year, with Work noting that prior-year comparisons included favorable foreign exchange valuation and interest income that did not repeat, and that share repurchases reduced basic shares outstanding by about 10%, impacting loss-per-share guidance by an additional $0.07.
For full-year fiscal 2026, Work said the company would not provide specific annual guidance but indicated that, assuming relative macro stability, management believes it can grow total sales in the low single digits, inclusive of an estimated $12 million sales headwind from closed stores. He said the company anticipates operating margin growth of 50 to 100 basis points in fiscal 2026 and expects a full-year effective tax rate of roughly 35% to 40%, compared with 44.4% in 2025.
On store plans, Work said the company expects to open five new stores in 2026, all in the U.S., and plans to close about 25 stores (20 in North America and five internationally). Brooks said closures reflect continued traffic and demand shifting toward stronger malls, adding the company is often “one of the last retailers to leave” weaker centers.
About Zumiez (NASDAQ:ZUMZ)
Zumiez, Inc (NASDAQ: ZUMZ) is a specialty retailer offering apparel, footwear, accessories and hardgoods targeted at the action-sports lifestyle market. With a focus on skateboarding, snowboarding, BMX and streetwear, the company stocks a mix of leading third-party brands—such as Vans, Nike SB, DC Shoes and The North Face—alongside proprietary private-label merchandise. In addition to traditional fashion items, Zumiez stores carry hardware and equipment tailored to board sports, supporting both amateur and enthusiast consumers.
Originally founded in 1978 in Seattle, Washington, by Tom Campion, Gary Haakenson and Steve Brosvik, Zumiez opened its first branded retail location in 1988.
