Zumiez (ZUMZ +1.39%) reported second quarter 2025 earnings on September 4, 2025, posting net sales of $214.3 million (up 1.9% year-over-year) and a narrower net loss of $1 million compared with $8.8 million last year. Zumiez achieved five consecutive quarters of positive comparable sales, a record 30% private label sales penetration year-to-date, and strong North American back-to-school momentum were highlighted alongside continued international challenges and guidance for a return to full-year profitability.
Private label penetration at Zumiez hits record 30%
Private label products accounted for 30% of year-to-date sales, up from 27% year-to-date a year ago, marking an all-time high and demonstrating Zumiez’s ability to both identify and react to rapidly evolving youth fashion trends. Gross profit margin rose 130 basis points YoY to 35.5%, attributed in part to higher-margin private label performance as well as operational leverage from store closures.
"Private level performance remains exceptionally strong, reaching 30% of total sales year-to-date through the second quarter, versus 27% a year ago, and represents the highest private label penetration in our history. This sustained expansion showcases our organization's capability to identify emerging trends and create compelling products that connect with our customers while enhancing our margin profile."
-- Rick Brooks, Chief Executive Officer
The accelerated shift to high-margin private label not only differentiates Zumiez’s merchandise but also directly strengthens gross margin resilience against industry-wide promotional headwinds, as private label penetration reached 30% of total sales year-to-date.
Zumiez delivers 11.2% U.S. comp sales growth in August
August comparable sales in the U.S. grew in the low teens, building on a double-digit increase YoY and sustaining company-wide momentum into the key back-to-school period. For the thirty-day period ended September 1, 2025, overall company net sales rose 10.6% year-over-year with North American comparable sales rising 13%, driven by strength in women’s apparel, increased transaction value, and traffic gains.
"Our momentum continued to build into August, with low teens comparable sales growth in The United States, on top of a double-digit increase in the year-ago period, providing confidence in our approach and optimism heading into the important holiday season."
-- Rick Brooks, Chief Executive Officer
This two-year comparable sales stack of 23.3% for the thirty-day period ended September 1 and sets a compelling foundation for robust holiday season results.
Zumiez targets high single-digit operating margins long term
Management reiterated its ambition to restore enterprise operating margins to high single-digit levels over the long term, citing significant opportunity in U.S. sales recovery to 2019 levels and continued improvement in product margin. Europe remains a turnaround focus as the company executes a multi-year plan, currently in year one of a three-year effort to return the region to breakeven, with management acknowledging recent macroeconomic stagnation in Germany and ongoing international headwinds.
"I don't think our long-term goals have changed. Now I'm not saying this is where we're going to be in the next three years, but I think over time, we still believe we can get long-term operating margins back to that high single-digit level. We've been there before. We've been beyond that before. And I think it speaks to what Rick's talking about is number one, a sales recovery. Right? When you look at our sales even compared to a period like a lot of retailers look at 2019, there's a good chunk -- still a good discrepancy from where we are planning this year to 2019."
-- Chris Work, Chief Financial Officer
The explicit return-to-margin target confirms a deliberate strategy to blend top-line growth with merchandising power, with further upside contingent on successful execution of the European turnaround and full realization of North American sales momentum.
Looking Ahead
Management guides to net sales of $232 million to $237 million for Q3 FY2025, comparable sales growth of 5.5% to 7.5%, and EPS of $0.19 to $0.29 versus $0.06 in the prior year period, alongside product margin expansion and operating income of 2.3% to 3.3% of sales. Full-year outlook calls for sales growth of 3% to 4%, modest product margin improvement on top of 70 basis points gains in FY2024, and a return to annual profitability despite closures of approximately 20 stores. Capital expenditures are forecast at $11 million to $13 million, with a full-year effective tax rate of approximately 50% and a projected diluted share count of 17.3 million shares.
