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Zumiez Inc ZUMZ
Q4 2012 Earnings Call Transcript

Transcript Call Date 03/14/2013

Operator: Good afternoon, ladies and gentlemen, and welcome to the Zumiez Incorporated Fourth Quarter and Full Year Fiscal 2012 Earnings Call. At this time, all participants are in listen-only mode. We will conduct a question-and-answer session towards the end of this conference.

Before we begin, I would 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 particular 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, and 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 filings with the SEC.

I would now like to turn the call over to Mr. Rick Brooks, Zumiez Chief Executive Officer. Please go ahead sir.

Richard M. Brooks - CEO: All right, thank you and welcome everyone. I'm joined today by Chris Work, our Chief Financial Officer. After my remarks Chris will take you through our financial and operating highlights for the fourth quarter and the full-year and then we will open the call up to your questions.

We delivered a solid fourth quarter with earnings of $0.74 per share. This is above our original projection and brought our full-year to a record $1.35 per share, including significant cost associated with our acquisition of Blue Tomato and cost for the relocation of our web fulfillment facility and corporate offices. These bottom line results were achieved through the successful execution of the growth strategies outlined at the start of fiscal 2012 combined with a partial year of contributions from Blue Tomato operations.

Net sales for the fourth quarter increased 22%, and for the full-year rose 20%. While our comps in fourth quarter were down 1%, we are proud of our overall execution and to achieve a 5% comp gain for entire year. The past 12 months were highlighted by managed strategic approach to extending our reach both domestically and abroad.

In the U.S. we opened 43 new stores in both new and existing markets and continued to build on the (positive) momentum of Zumiez.com. Through the relocation of our web fulfillment center to Kansas we provided this business the adequate room to grow and ability to extend our best-in-class customer experience.

Internationally, we doubled our store base in Canada with the opening of 10 new stores. We also took a major step to increase our global presence with the acquisition of Blue Tomato, which we believe is a premier operator in the large but highly fragmented European action sports market. Importantly, this is an organization that shares the same values as Zumiez, and we believe this cultural match is critical to the long-term growth and success of this venture.

As Chris will explain in more detail in a moment, we have decreased our assumptions around the estimated earn-out associated with the Blue Tomato transaction due primarily to short-term challenges in the face of a difficult European economy. To be clear, though, our confidence of the long-term value this endeavor will create has not changed.

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