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Zumiez (ZUMZ -0.18%)
Q4 2023 Earnings Call
Mar 14, 2024, 5:00 p.m. ET
Contents:
- Prepared Remarks
- Questions and Answers
- Call Participants
Prepared Remarks:
Operator
Good afternoon, ladies and gentlemen, and welcome to the Zumiez Inc. fourth-quarter fiscal 2023 earnings conference call. At this time all, participants are in a listen-only mode. We will conduct a question-and-answer session toward 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's 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 filings with the SEC. At this time, I will turn the call over to Rick Brooks, chief executive officer. Mr.
Brooks?
Rick Brooks -- Chief Executive Officer
Hello, everyone, and thank you for joining us on today's call. With me today is Chris Work, our chief financial officer. I'll begin with a few remarks about our fourth-quarter and full-year performance before discussing some of our strategic priorities for 2024. Chris will then take you through the financials and our outlook for the coming year. After that, we'll open the call to your questions.
The fourth quarter represented an encouraging finish to what was a challenging year. As was the case throughout fiscal 2023, we faced headwinds in the fourth quarter, including highly promotional activity across the soft lines retail sector and an increasingly selective consumer pressured by the multiyear inflationary impact on discretionary income. That said, our men's business turned positive in November and growth accelerated in both December and January. Overall momentum built throughout the quarter with total sales trends improving month to month, culminating in January turning to positive comparable sales, fueling fourth-quarter sales and adjusted EPS that were both above the high end of our guidance ranges. In many ways, in the fourth quarter, monthly sales trends were a microcosm of the trend we've seen throughout the year. To recap our improving trend line, year-over-year total sales were down 70% in first quarter, down 12% in the second quarter, down 9% in the third quarter, and down less than 4% in the fourth quarter excluding the benefit of the 53rd week, which drove sales slightly positive for the quarter.
As we enter 2024, we have continued to see some areas of strength in our business. While total sales trends for February were not yet positive, we did see sequential strength as we move through the month and noted that the primary headwind was tied to seasonal snow sales in Europe that turned negative in February after being significantly positive in January due to the timing of promotions. From October through February, Europe's snow sales were down low single digits despite significant variability across periods that pushed our seasonal snow comparable sales positive in January and negative in February. To be clear, 2023 was a disappointing year overall, and we're not satisfied with our results.
With two years of meaningful negative comparable sales trends, the business has deleveraged significantly, and we experienced the first annual net loss in our history this last year. As we look to 2024, we expect the macro climate to remain a headwind in the near term, as Chris will detail in our outlook, however, we are optimistic that the work we're doing will inflect our trend line positive. Overall, we will focus on items within our control to grow sales and drive the business back to profitability. To that end, we plan to take specific actions to adjust portions of our strategy in the new year. I'll quickly take you through the most significant changes starting with a shift in focus for the European business. The last few years have been particularly challenging for profitability in the European market.
The business is close to achieving breakeven in 2019 before the onset of the pandemic. However, the longer and stricter pandemic area closures in Europe, combined with the inflationary impact to the consumer and instability in the region in the year since, have resulted in earnings declines for our European business since 2020. To correct this negative trend, we're pivoting our focus away from store expansion to enhancing the productivity of the existing European business. With the solid foundation of nearly 90 stores across nine countries and a pan-European web business, we believe we have adequate penetration today in the relevant European markets to unlock the potential for the concept and to create value as we work through what has been a difficult cycle.
By focusing on increasing the productivity of our current business in Europe will improve our near-term profitability and cash flow while also creating a profitable platform for long-term growth in the future. We have seen positive signs such as double-digit comparable sales growth in Germany, the Netherlands, Norway, and Sweden during the year, which gives us confidence that we can achieve profitability in Europe as we've done in other international markets like Canada and Australia. There's no doubt that trends emerge locally and grow globally. We remain relevant in these markets as a significant advantage to Zumiez over the long term and serving both our customers and our brand partners. This heightened emphasis on profitability extends beyond Europe.
In 2023, we closed 20 underperforming North American stores and expect to close an additional 20 to 25 locations in 2024 should results continue to be challenged. As a result, we have reduced field and corporate staffing levels to align with reduced store count. We also further optimizing store labor through several initiatives including adjustments to staffing models at lower-volume stores. We have made structural changes to reducing shipping and logistics costs companywide and continue to implement other cost savings opportunities in many areas throughout the organization. While we heighten our focus on profitability companywide, we're also making investments to ensure we continue to win with customers including injecting assortments with newness. In 2023, we launched nearly 200 new brands, almost double a typical year, and we expect this newness with relevant and desired brands to continue to attract a broader customer set into 2024 and beyond. We're already seeing our new brands launched in the last couple of years represent a larger portion of our sales than we've historically seen, which we believe is an indication that they're resonating with our customers.
We're also growing our private-label brands. Private label represented approximately 23% of sales in 2023, compared to 18% in 2022 and 13% in 2021, which is a testament to our teams in capturing both the trend and value customer and provides another significant runway for growth. And we're maintaining our best-in-class service in stores and on the web with continued investment in training and technology that, combined, are aimed at enhancing our relationship with customers and connecting with them in a more personalized and relevant way. After two challenging years, we're ending 2024 with a strong balance sheet and over $170 million in cash that -- that will allow us to weather the current environment. Before I call -- before I close the call and turn the call over to Chris, I'd like to thank our teams and our brand partners for their efforts and partnerships in 2023. Our talented and dedicated people have been a bright spot while we've navigated recent challenges, and will be the driving force behind the company's return to sustainable growth in the quarters and years ahead. I remain confident in our ability to serve our customers and drive back to profitability and positive cash flow and look forward to updating you on our progress in the quarters ahead.
With that, I'll turn the call over to Chris to discuss the financials.
Chris Work -- Chief Financial Officer
Thanks, Rick, and good afternoon, everyone. I'm going to start with a review of the fourth-quarter and full-year 2023 results. I'll then provide an update on our first quarter-to-date sales trends before providing some perspective on the full year. Net sales for the fourth quarter of 2023, which was a 14-week period, increased 0.6% to $281.8 million, compared to $280.1 million in the fourth quarter of 2022, which was a 13-week period. Comparable sales were down 3.9%.
The decrease in comparable sales was driven by continued inflationary pressure on the consumer, continued challenges and competition for the discretionary dollar, and tougher trends in certain categories of our business. From a regional perspective, comparing the 14-week period in the current year to the 13-week period in the prior year, North America net sales were $212.4 million, a decrease of 3.4% from 2022. Other international net sales, which consist of Europe and Australia, were $69.4 million, up 15.2% from last year. Excluding the impact of foreign currency translation, North American net sales decreased 3.4% and other international net sales increased 12.3% compared with 2022.
Comparable sales for North America were down 5.4%, and comparable sales for our other international were up 0.9% for the 14 weeks ended February 3rd, 2024. From a category perspective, men's was the only category with positive comparable sales for the quarter, while all other categories were down from the prior year. Women's was our most negative category followed by accessories, hard goods, and footwear. The decrease in comparable sales was driven by a decrease in transactions, partially offset by an increase in dollars per transaction. Dollars per transaction were up for the quarter driven by an increase in units per transaction and an increase in average unit retail. Fourth-quarter gross profit was $96.7 million, compared to $95.3 million in the fourth quarter of last year.
Gross profit was 34.3% of sales for the quarter, compared with 34% in the fourth quarter of 2022. The 30-basis-point increase in gross margin was primarily driven by 70 basis points of benefit in shipping costs related to better outbound shipping rates, 60 basis points positive impact related to a mix shift away from service and related shipping revenue in the prior year, results which carried a negative margin during the prior year quarter and 30 basis points of leverage in store occupancy costs related to a reduction in total expense year over year combined with the modest increase in sales related to the 53rd week. These benefits were offset by 110-basis-point reduction in product margin due to discounted selling to manage agent inventory, which was generally in line with our expectations, and a 20 basis points of deleverage in fixed and other costs included in gross margin. SG&A expense for the fourth quarter of 2023 was $129.4 million, or 45.9% of net sales for fiscal 2023, compared with $80.1 million, or 28.6% of net sales in 2022. This includes a $41.1 million noncash goodwill impairment charge that resulted from our decision to slow growth in Europe and focus on profitability. This change in our modeling had a direct impact on the future cash flow projections of our Blue Tomato business that have been tied to increased store growth and improved performance as we grow the business.
The 1,730-basis-point increase in SG&A expenses as a percent of net sales was driven by the following: 1,440-basis-point increase driven by the impairment of goodwill in Europe, 140-basis-point increase related to store wages deleveraging on the decrease in comparable sales as well as wage rate increases; 70-basis-point increase in nonwage store operating costs; 50-basis-point increase in other corporate costs; and 30-basis-point increase in nonstore wages. Operating loss in the fourth quarter inclusive of the 41.1 million goodwill impairment charge was $32.8 million, or 11.6% of net sales, compared with operating profit of $15.2 million, or 5.4% of net sales last year. Net loss for the fourth quarter was $33.5 million, or $1.73 per share. This includes the goodwill impairment charge which, on an after-tax basis, was $41.1 million, or $2.13 per share. In the year-ago period, we reported net income of $11.4 million, or $0.59 per diluted share.
We had tax expense in the current quarter despite our pre-tax operating loss due to the distribution of pre-tax income across our different tax jurisdictions. This compares to an effective tax rate of 29.2% in the fourth quarter last year. Looking at our full-year results, net sales for the 53 weeks of fiscal 2023 were $875.5 million, a decrease of 8.6% from $958.4 million in 2022. Comparable sales for the full year were down 10.6%. The decrease in comparable sales was related to continued inflationary pressures on the consumer, continued challenges and competition for the discretionary dollar, and tougher trends in certain categories of our business. From a regional perspective, North America net sales were $697.6 million, a decrease of 13.1% from 2022.
Other international net sales were $177.9 million, up 14% from last year. Excluding the impact of foreign currency translation, North American net sales decreased 12.9%, and other international net sales increased 11.8% compared with 2022. Comparable sales for North America were down 13.5%, and comparable sales for other international were up 3.4% for the 53-week year ended February 3rd, 2024. From a category perspective, all categories were down from the prior year in comparable sales. Footwear was our most negative category followed by women's, accessories, hard goods, and men's.
The decrease in net sales included a decrease in transactions, partially offset by an increase in dollars per transaction. The increase in dollars per transaction was driven by an increase in average unit retail, partially offset by a decrease in units per transaction. 2023 gross margin was 32.1, compared with 33.9% in 2022. The 180-basis-point decrease was driven by deleverage in our fixed costs as well as rate increases in several areas. The key areas driving the decline were 130 basis points of deleverage in store occupancy costs and a 70-basis-point decline in product margin. These decreases were partially offset by a 20 basis points of efficiencies in distribution costs.
SG&A expense was $345.7 million, or 39.5% of net sales for fiscal 2023, compared with $293.6 million, or 30.7% net sales in 2022. This includes the $41.1 million of goodwill impairment mentioned in our quarterly update. The 180-basis-point increase as a percentage of net sales was driven by 470 basis points due to the noncash goodwill impairment; 180 basis points increase related to store wages, deleveraging on the decrease in comparable sales as well as wage rate increases; 110 basis point increase in nonwage-related store operating costs and 80 basis points in nonwage -related corporate costs; and 60 basis points in non-store wage costs which includes a benefit in the prior year of 40 basis points related to a 3.6 million European government stimulus payment. These increases were partially offset by a 20-basis-point decrease in training and events. Operating loss in 2023 was $64.8 million, or 7.4% of net sales, inclusive of the 41.1 million goodwill impairment charge, compared with operating income of $31.1 million, or 3.2% of net sales last year. Full-year net loss was $62.6 million, or $3.25 per share including the noncash goodwill impairment charge booked in the fourth quarter of 2023 worth $41.1 million, or $2.13 per share. This is compared to net income of $21 million, or $1.08 per diluted share in 2022.
Turning to the balance sheet. The business ended the year in a strong financial position. We had cash and current marketable securities of $171.6 million as of February 3rd, 2024, compared to $173.5 million as of January 28th, 2023. The slight decrease in cash and current marketable securities over the last year was driven primarily by capital expenditures of $20.4 million, partially offset by cash flow from operations of $14.8 million.
As of February 3rd, 2024, we have no debt on the balance sheet and continue to maintain our full unused credit facility. We ended the year with $128.8 million in inventory, down 4.4%, compared with $134.8 million last year. On a constant-currency basis, our inventory levels were down 4.1% from the last year with decreases in both our North America and European businesses. Given the sales backdrop, we are happy with our ending inventory balance for 2023 and expect to continue to bring newness in as we move through 2024. Looking forward to 2024, it is important to remind everyone that 2023 was a 53-week year while 2024 is a 52-week year. With the calendar shift, we expect sales and profit movement between quarters across 2024 are creating comparability challenges year over year in our commentary.
As such, we will provide actual comparable sales to like periods as we move through the year, which will represent a better measure of current performance. Additionally, with the closures in 2023 and anticipated closures in 2024, we expect our store count will be down year over year on a quarter-to-quarter basis, which will negatively impact total sales growth while having more muted impact on earnings due to the performance of those closures. Now, to our first quarter-to-date results. Total net sales for the four-week fiscal period ended March 2nd, 2024 ended three -- decreased 3.1% compared to the four-week fiscal period ended February 25th, 2023. Our comparable sales decreased 6.2% during the four-week period ended March 2nd, 2024 from the comparable weeks in the prior year. Fom a regional perspective, North American net sales for the four-week period ended March 2nd, 2024 increased 2% over the four-week period ended February 25th, 2023, while our other international business decreased 18.6%.
Excluding the impact of foreign currency translation, North American net sales increased 2.1% and other international sales decreased 18.5% compared with 2023. Comparable sales for North America decreased 2.6 for the four-week period ended March 2nd, 2024 compared to the same weeks in the prior year, while comparable sales for our other international business declined 17.8%. From a category perspective, the men's category was our largest positive comparable sales growth category followed by footwear. The hard goods category was our largest decline in comparable sales, followed by accessories and women's.
The comparable sales decrease was driven by a decrease in transaction, partially offset by an increase in dollars per transaction. Dollars per transaction increased for the four-week period due to an increase in units per transaction, partially offset by a decrease in average unit retail. With respect to our outlook for the first quarter of fiscal 2024, I want to remind everyone that, formerly, our guidance involves some inherent uncertainty and complexity in estimating sales, product margin, and earnings growth given the variety of internal and external factors that impact our performance. With our sales results in early fiscal 2024 showing a small step back from our Q4 trends, we entered 2024 with some caution. While we are optimistic that we could see continued improvement in the business as fiscal March-to-date sales have trended better with new spring receipts, we are planning more conservatively, anticipating total sales for the first quarter between $167 million and $172 million. We expect that our first quarter of 2024 product margins will be down year over year against the current backdrop but an improvement from our Q4 run rate. We believe that the first quarter of 2024 will see a continued negative impact on product margin related to a mix shift away from service and related shipping revenue in the prior-year results. While the product margin impact of this mix shift is negative, the overall impact of gross profit is negligible.
We do not anticipate this mix shift will have a material impact beyond our first quarter of 2024. Consolidated operating loss as a percentage of sales for the first quarter is expected to be between negative 15% and negative 17%, and we anticipate our loss per share will be between $1.09 and $1.19, compared to a loss of $0.96 in the prior year. As we consider the outlook for the full-year 2024, there remains uncertainty and volatility in the macro environment. Given this, we will refrain -- refrain from giving specific annual financial guidance but do want to add some context around how we currently believe the business will trend throughout the year. We have experienced several negative sales trends over the past two years driven by the pandemic, inflation, competition for the discretionary dollar, negative brand trends, and general global instability. Given the magnitude of the multiyear decline, we believe that we are beginning to see the impact of those negative business trends moderate, and our current results are showing the new trends are taking hold. This includes our men's category being positive across Q4 and into February.
At this time, we believe we can build upon these trends throughout 2024 and see total sales growth for the full year. After two years of difficult performance and product margin, we believe that with a more stable sales environment, we will grow product margin in 2024. With sales growth in 2024, we anticipate that we'll leverage SG&A costs year over year beyond the benefit we will receive of moving past the $41.1 million goodwill impairment charge we recorded in the fourth quarter of 2023. With the previously mentioned assumptions, we believe will turn -- return to positive operating margins for the full year.
While effective tax rates are likely to fluctuate significantly by quarter, we anticipate that our full-year effective tax rate will be roughly 40% in fiscal 2024. We are planning to open 10 new stores during the year, including three in North America, three in Europe, and four stores in Australia. This is down from 19 stores in 2023 and 32 stores in 2022 as we focus on optimizing our current footprint. We expect our capital expenditures for 2024 to be between $14 million and $16 million, compared to $20.4 million in fiscal 2023 and $25.6 million in fiscal 2022. The reduction is primarily due to fewer planned store reopenings -- or store openings. We expect that depreciation and amortization excluding noncash lease expense will be approximately $23 million and consistent with the prior year.
We are currently projecting our diluted share count for the full year to be approximately 19.8 million shares. And with that, operator, we'd like to open the call up for questions.
Questions & Answers:
Operator
Thank you. At this time, we'll conduct the question-and-answer session. [Operator instructions] Our first question comes from Corey Tarlowe with Jefferies. Please proceed with your question.
Corey Tarlowe -- Jefferies -- Analyst
Great. Thanks and good afternoon. As it relates to Europe, where are you seeing green shoots, and then where are you seeing opportunities to improve as we look ahead and you assess the viability of certain regions or areas in which you're currently present as you think about the -- the go-forward outlay for that region for your business?.
Rick Brooks -- Chief Executive Officer
All right, I'll start, Corey, and then Chris can add on to -- add on his comments too. I think that there really is -- what's important in this conversation is a pivot in Europe away from store growth because obviously we were growing sales in -- in Europe over the last few years, but sales have been challenged relative to our expectations for the sales growth that we expect to see in Europe. And opening new markets is an expensive proposition. So, what you're really seeing us do here is say we need to cut -- we need to really refocus our team's efforts on going back and giving them the time and the bandwidth to go back and really focus on building out profitability in our existing markets. And that's our focus.
And as we -- as we comment in the script, we've seen some good results in -- particularly in Germany last year, which is our -- I think our biggest market in terms of unit count in Europe. We had a double-digit gain in the year. We made significant progress relative to profitability in that market, but we have more progress to make, Corey. And I guess that's what you're seeing, as I'm saying here, is we're going to put a pause on growth, build a profitable base, and then reconsider where we go from there. So, this is more about basics, it's about the fundamentals and tactics.
And we have markets that are profitable in Europe, to be clear, but this is about getting them all moving in a -- in a -- in the right direction. Getting back to that, what are our teams look like in every location, driving better product margins across the business, controlling and managing expenses more effectively by not -- again, reducing the cost of entering new markets as an example. And so, we're back to basics, and I would tell you much the same thing about here in our -- in our North American business too. So, I think of more about perspective of we have opportunity there and we have opportunity to grow the profitability on a -- for all basis across those markets and win our web business in -- in Europe. So, it's really about the pivot, slowing growth, focusing on building that profitable base, doing and executing the basics, and putting all of our efforts into that.
Corey Tarlowe -- Jefferies -- Analyst
Great, thanks. And then, I have two more if I can. On North America, the men's business seems to have made a turn. How do you think about the prospects for that to potentially drive maybe perhaps a more widespread momentum across the other categories of the business now that you've seen the turn there? And then, just briefly on store count, on the -- I believe it's 10 openings that you're anticipating.
What would be the net number for the full year?
Rick Brooks -- Chief Executive Officer
All right, great. I'll take the first part, and again, Chris, add on as you like. So, the North American business, I -- the good news, this is -- you know, I have good news for you on North America is the improvement in our North American business is directly related to the comments we made in the script earlier. Our private label business is dead on. I think the trends were doing really fun, creative things there.
Multiple trends are working for us in private label, and private label is growing in absolute dollars despite the overall sales decline. We're not declining in private label on a relative basis. Not a gain share on a -- on a relative basis, it's a gain in absolute dollars in our business in private label. So, we have a lot of momentum there.
And I think we're on the early edge. I think we've been not just on those trends, but we've been leading the trend cycles that we're seeing out to the market. So, that is a huge driver for private label. It also has, I think, a positive benefit of women's that we'll see play out over time in terms of what we're doing on the women's side with our private-label brands. And again, it's both about the freshness we can offer the consumer and being on those trends, building those trends for our customer, as well as the value proposition we have by the move, the ability we have with private label to do bundling and things like that for customers to provide more value for them beyond just cheap prices. That's never been our strategy.
The second thing on men's that's really I think again directly correlated to the results we're seeing, and we comment on this in the script too, is that the emerging brands in '22 and '23 -- and I will tell you, particularly in '23, the brands we launched in '23. And in some cases, the brands we launched in the back half of 2023 are gaining significant share in our business and have been doing so month over month, quarter -- better, deeper penetration in Q4 than Q3. And so, this is the newness -- when we talk about injecting newness into the business, this is what we're talking about, and we're seeing it resonate, and that these trends that we're seeing are the exact things that are driving our positive trend in the men's business. So, as we think about that, with new brands, Corey -- Corey, what we'll look to do there in terms of broad amount of categories is we'll look to do exactly that, which is how can we take a screen or brand and get them into accessories -- in different accessories categories, how can we partner with -- with -- collab and things like that with these brands to help drive more sales for them, how can we expand them to new categories of business? These are the things will be working with -- you know, again not all of them, but select brand partners to try to drive even more sales results. And I just think these are -- again, we're new in a lot of these, we're going to -- these are just -- these are brands that are -- just continue to gain share.
And again, we intend to launch a lot more new brands throughout 2024. That's always our goal every year. So, I just want to be clear, there's a direct correlation between what we're seeing in the improving trend results and the -- and new brands and the efforts we put into private label. So, they're -- they're directly correlated, and they're driving to better results. And I think we can expand it to other categories, absolutely.
And potentially, we'll be able to lever some of that benefit for other departments within the business too
Chris Work -- Chief Financial Officer
Yeah, and I just add a couple quantification points to men's before I answer your question around store count that, you know, men's -- men's as a percentage of our total sales grew from 43% to 47%, which I think is a -- is a strong metric for our business. And it ties into some of the thoughts we gave annually as far as the belief that we think we can grow sales for the year. What I think is really good about the men's business is it turned positive in back to school. While it wasn't positive for all of Q3, it was positive during that six-week period, and then again turned positive in November and December during the peak, and now, has remained positive in January and February. I bring that up because as we look back on the business and we look at other periods that have been a little more challenging from a financial perspective for us, it the last one being '15 and '16, men's really was , and specifically men's t shirts, was really was the -- the driver for us coming out in growth of '17, '18, '19.
So, again, I give our buying teams a lot of credit here. This is about finding newness and brands that will stick and -- and men's really is the driving category. So, I think it's a good call-out from you to ask. From a store count perspective, I guess, what we plan to do right now and what we said in the script is that we would probably open 10 stores and close 20 to 25 stores. But in answering that question, I do want to step back because we also noted that we closed 21 stores in 2023. So, you know, as you think about that on a two-year combined closure, it is a pretty significant closure cycle for us and really not a territory we've been in before.
So, I want to be careful in getting closure numbers. Because of the 20 to 24 closures in 2024, I mean this could increase or decrease as we move through the year depending on, you know, how our results go and -- and our ability to work both with our landlord partners, as well as, you know, internally on some of the things that -- that we -- that we control. And when it comes to closures, it's not a process we really take lightly either. We have a pretty detailed process to look at closures. We try to factor in things, obviously, the sales and profitability levels of the specific location in question. But we also look at what does that store mean to its trade area.
And as we think about serving that customer, what other opportunities do we have around that store to -- to impact that customer. We look at the condition of the center and, you know, how the landlord's plans for the center are playing into the location in regards to vacancies and the ability to -- to bring newness to a location. And then, you know, we look at peak performance and working through if some of the declines we see in our business right now are permanent or temporary based on the current state of the market. I think that's a really important thing that we do and then, you know, what else we can do about the store economics. So, we go through a pretty diligent process.
I think after factoring in all of those things, if we make the determination it's a store to close, it probably means that it's in a location or a mall that is -- is, you know, one of the declining centers that we have in our country and -- and something that will -- we'll close. So, for 2023, the majority of our closures were in North America. In 2024, we anticipate that will hold true, although we do expect some closures in Europe as well. You know, this will be -- it does have an impact on overall sales, although, again, I mean despite this, which we estimate to be about $10 million and the 53rd week, we still think we can grow sales in excess of those amounts.
Corey Tarlowe -- Jefferies -- Analyst
Very helpful. Thank you so much and best of luck.
Rick Brooks -- Chief Executive Officer
Thank you.
Operator
One moment for our next question. Our next question comes from Mitch Kummetz with Seaport. Please proceed with your question.
Mitch Kummetz -- Seaport Research Partners -- Analyst
Yes, thanks for taking my questions. I've got maybe a few housekeeping and then maybe a couple that are a little more strategic because I think you maybe partly answered my first question. Just on the 53rd week, what was the sales and earnings impact in '23, was that the 10 million in sales that you just referenced? I -- maybe I didn't hear that correctly.
Chris Work -- Chief Financial Officer
No. The 10 million in sales is -- is referencing the closures, the amount that the 21 stores we closed are worth in -- in sales. The 53rd week is going to be worth about $12 million.
Mitch Kummetz -- Seaport Research Partners -- Analyst
And what about on the earnings?
Chris Work -- Chief Financial Officer
It's about $1.8 million of operating profit.
Mitch Kummetz -- Seaport Research Partners -- Analyst
OK, that's helpful. Thank you. And then, on the -- on the 1Q guide, you gave us a sales range. Is there sort of a comp assumption that's embedded in that range?
Chris Work -- Chief Financial Officer
Yeah, the comp assumption, and this year, we'll have a little bit of a negative spread obviously because of how the closures impact it. So -- but it won't be that significantly different than the range we gave.
Mitch Kummetz -- Seaport Research Partners -- Analyst
OK, and then on the full year, you -- again, you expect sales growth, and I want to say that that's inclusive of the 53rd week in '23. So, maybe just to confirm that. But then also, given -- given the net store closures that you're anticipating, I assume that you're expecting comp growth for the year? Can you just confirm that?
Chris Work -- Chief Financial Officer
Correct. Yeah, when we talked about -- you know, we didn't give specific guidance for the year or numbers, obviously, just given kind of the uncertainty and what's ahead. But we are planning the business with sales growth, factoring in both the 53rd week challenge that we'll have, as well as the $10 million in store closures.
Mitch Kummetz -- Seaport Research Partners -- Analyst
Is the -- is the -- so, if there's comp growth in '24, do you anticipate, you know, some of that coming from just like -- now that you've slowed the growth or shut down the growth of -- of stores in Europe, is there an opportunity for comp growth in Europe, just kind of from -- from -- from the standpoint of like how much ramp, or do you see that as an opportunity?
Chris Work -- Chief Financial Officer
Yeah, I think I would look at this -- I'm going to take just your question a little bit higher level and then I'll come into Europe. I think when we're looking at this business, we think we have opportunity for comp growth really across the business, specifically because of, you know, what we know this business has been able to do and where we have landed here these last couple of years, which is, you know, pretty disappointing to us, to be quite frank. But we're looking at many of these locations knowing that, you know, we've got good locations. We've got, you know, buyers that are really honed in on finding the right product for what's next.
We've got good sales teams that are out there to serve the customers. And so, as we -- as we tie this together and we think about 2024, we think we have a good opportunity. Now, earlier in this call, we talked about men's as being an opportunity, and I think that's a really good place for our business to start. I think each of our other categories, you know, have had some challenges as well. So, as we look at those and we look at some of these new brands that Rick spoke to and the fact that, you know, we continue to bring a lot of newness into the business, we think we have opportunity in our other categories as well.
Geographically, we know that North America has been challenged. You know, it has been just as much, if not more than Europe. So – so, we know that that in the U.S., we've got opportunity. We believe we have opportunity in Canada.
And as it comes to Europe, I think you're absolutely right, we've got a lot of new units. We've been very focused on new markets and growth. And as Rick said, we're sort of pausing that with the idea that we -- we need to grow comp and we need to focus on the customer and get back to basics to drive to profitability and cash flow, right, within that region. And then, I think once we get to that level, we have the opportunity to -- to rethink about growth because there still is a lot of growth in Europe. I don't want to give the impression that the growth is not there.
We just have to be able to do it in a profitable way with cash flow. And -- and as we think about Europe individually, I mean, despite the pullback we saw in overall sales, I mean, Europe did comp in 2023. It just did not comp to a level that we needed it to, especially in light of what you've seen with wage inflation and some of the other costs that have gone up in Europe. So, I -- you know, I believe there's comp opportunity across the business, and I think that's why you're hearing us, you know, be pretty confident about the ability to -- to grow sales despite the fact that we've got the 53rd week and some closures, you know, that we've got to overcome.
Mitch Kummetz -- Seaport Research Partners -- Analyst
OK, and then maybe two last ones are a bit more strategic. One, on the new brands, it sounds like the benefit that you're seeing there is mostly on the men's side. Is there also -- I think, Rick, you mentioned the opportunity to do more in women's with private label, but there is also an opportunity to add brands to help the women's business. That'd be my first question. And then, secondly, one month doesn't make a trend, but footwear, it looks like, was positive in February.
I'm just wondering to what, you know -- is that really a function of that you're just starting to lap easier compares? Or have you also kind of worked on sort of pivoting the footwear assortment to try to drive better results there?
Rick Brooks -- Chief Executive Officer
All right, thanks for the question, Mitch. First, I guess, just for clarity purposes around brands, we have some brands that are new brands we've launched that are working well in women, so be clear about that and -- and where it's really made a difference in the business, just not enough to tip it to the positive at this stage of the game. And private label, we have a lot of good stuff there too. So, we're -- and then other brands that we're launching that are predominately having the benefit of men's, we know there's also a unisex aspect to how our customer buys product.
So, it becomes a little harder for me to quantify that for you to how it's impacting women, but that's -- that -- that -- we see that throughout our business with -- with -- with women buying boy's shoes as an example would be another example where we know it's happening based upon the seismic that we see playing out there, or we see it in t shirts where we're selling small size of the men's disproportionately to our typical business. So – so, it's a little bit hard to answer that question, Mitch, just because we know there's this unisex aspect to our business, particularly with women in the -- in the business. But, yes, we do have some brands that are specifically new in the women's business and we're seeing some success, just not enough to tip it to the positive at this point. So, we're always looking for brands across wide ranges that we think will really be relevant for all of our customers, I would guess, would be the -- the message halfway there. On footwear, in February, yes, it was positive, and -- but it was a really promotionally driven positive number. So, what I will tell you about footwear, Mitch, is -- is we have just been clearing footwear aggressively.
And we've had a lot of footwear. We've had some good help from our brand partners here in doing this, but as you know, it's been an issue and a challenged department for a while now. And so, what you're seeing us do is get inventory into position so that we can really go after newness in footwear. So, I think, Chris, inventory in footwear was down --
Chris Work -- Chief Financial Officer
Thirty percent.
Rick Brooks -- Chief Executive Officer
Thirty percent at the end of the year, Mitch. It should give you a sense of where we're at on the footwear inventory. We have aggressively -- been aggressive about clearing it out. And again, great support from our brand partners in helping us do that.
And we've done it also through liquidation. So, what you're really seeing over the last month is aggressive liquidation in the footwear market. Now, as we look forward, we definitely have some trends that are working and I'm sure you're identifying them on our footwear wall. And so, now it's about the right levels of inventory. It's about we're going to ride the trends that we know are working that really actually go together with the trends that are in our private label business, particularly in long bottoms. They're going to drive, I think, some that -- that will drive improved business in footwear.
And then, what our teams have done is we have a -- basically you -- if you were to see our plan for footwear throughout 2024, I think we have a really solid plan for injecting newness throughout the year on a regular -- pretty -- pretty regular basis. Period buy period, we're going to see us launch newness and build as we move -- really try to build and adjust as we move toward back to school and holiday with what works in the assortment and how we reposition our footwear wall for the -- to really hit those peak periods as best we can. So, I think the key takeaway on footwear is, yes, it was, but it was promotionally driven. Liquidation mode, I would say. But as we look forward, we now have inventory in a position where we can really go out and make investments really try -- as you know, it's a -- footwear is tough.
Because of the size -- the sizing, you do have to make larger investments in each style of footwear you try. So, we're going to do now is just go out there and have some fun. We're going to play our brand. Partners, again, are being incredibly supportive here, and we have a lot of newness coming in every period in footwear.
Mitch Kummetz -- Seaport Research Partners -- Analyst
All right, thanks. I look forward to seeing some size 14s in your stores. I appreciate you taking all my questions.
Rick Brooks -- Chief Executive Officer
Well, not that much newness, Mitch, so.
Operator
[Operator instructions] That concludes the question-and-answer session. At this time, I would like to turn the call back to Rick Brooks for closing remarks.
Rick Brooks -- Chief Executive Officer
All right, thank you, everyone. Again, we always appreciate your support of Zumiez greatly. And again, to our employees and all of our brand partners, we really, again -- as I said in the commentary earlier, we really appreciate the challenging area we've all worked through, and we're looking forward to hopefully a better and improved 2024. So, thank you, everyone, and we look forward to talking to you after the first-quarter results.
Operator
[Operator signoff]
Duration: 0 minutes
Call participants:
Rick Brooks -- Chief Executive Officer
Chris Work -- Chief Financial Officer
Corey Tarlowe -- Jefferies -- Analyst
Mitch Kummetz -- Seaport Research Partners -- Analyst
