Zumiez Inc.

Net sales for the second quarter of fiscal 26 decreased 2.5% to $209 million from $214 million a year ago, and comparable sales were down 2.1%. Gross profit was $73.9 million versus $76.1 million last year, and gross margin was 35.3% compared with 35.5% in the prior-year quarter. SG&A was $75.2 million, or 35.9% of sales, versus $75.9 million, or 35.4% last year. Operating loss was $1.3 million, compared with operating income of $0.1 million a year ago, and net loss was $2.7 million, or $0.17 per share, versus a $1 million loss, or $0.06 per share. For Q3, the company expects sales of $222 million to $226 million, down 5.5% to 7%, comparable sales of -5% to -6.5%, product margin down 20 to 40 basis points, operating income of 1% to 1.7% of sales, and EPS of $0.00 to $0.10. For fiscal 26, management now expects sales to be down low single digits, product margin roughly flat, gross margin roughly flat, SG&A down slightly in dollars, operating margin down slightly, and a full-year tax rate of roughly 55%.

Rick Brooks said the quarter was disappointing and below expectations, mainly because of U.S. softness and footwear weakness, but he emphasized that the international business is diversifying the company’s results and showing positive sales growth. He framed the current period as a transition, saying Zumiez is working to refresh assortments, lean into customer experience, and meet consumers where they are. He was notably optimistic about the team’s ability to adapt and said he expects changes to help the fourth quarter and 2027.

Christopher Codington Work laid out the financial impact of the softer quarter: sales down 2.5% to $209 million, gross margin at 35.3%, SG&A at 35.9% of sales, and a net loss of $2.7 million. He noted margin pressure from store occupancy deleverage, partially offset by tariff refunds, and said share count is down about 6% from repurchases over the last 12 months. On the balance sheet, Zumiez ended with $97.3 million in cash and current marketable securities, no debt, and a full $25 million unused credit facility; inventory was $157 million, roughly flat year over year on a constant-currency basis. He also said the company repurchased 1.2 million shares for $23.2 million in Q2 and had completed the $40 million authorization in early September.

Analysts focused on footwear weakness, asking whether the issue was legacy silhouettes, a shift in consumer demand, or an assortment problem. Management said Zumiez is in a difficult lifestyle athletic niche, is working with brand partners to add uniqueness, and believes it will be easier to see improvement as the company anniversaries the big negative comps in Q4. Another question centered on promotional pressure in back-to-school footwear; management said inventory exposure is manageable, Zumiez has not been as promotional as some competitors, but markdowns are still pressuring margins. On guidance, management said the Q3 outlook is intentionally conservative because the company is only a little over halfway through the quarter and historically performs worse after back-to-school.