Zumiez Inc. Navigates Challenging Market Conditions Amid Strong International Sales Growth

Good afternoon, ladies and gentlemen, and welcome to this report on Zumiez Inc.'s second quarter fiscal 2026 earnings conference call.

The company's CEO, Rick Brooks, and CFO, Chris C. Work, shared the latest trends in their business, including a 2.5% decrease in sales compared to the prior year. Despite this decline, Zumiez remains optimistic about its global expansion efforts, which have shown positive sales growth in the second quarter.

Notably, the company's international entities reported low single-digit comparable sales growth during the same timeframe, a significant improvement from previous quarters. This diversification of their business has helped mitigate the impact of softness in the U.S. market, where sales have been trending downward after strong performances in 2024 and 2025.

According to Brooks, the U.S. market's decline is largely due to a decrease in transactions and challenges in the footwear category, which accounted for 70% of the total U.S. sales decline through Labor Day. However, he emphasized that these down cycles are generally temporary and that Zumiez is actively working to refine its merchandise assortments and enhance its customer experience initiatives.

Internationally, the company remains focused on key strategic priorities, including driving revenue through product mix refreshment, growth of private label products, and maintaining a commitment to profitability optimization. With positive inflection in sales, they are making traction on these initiatives in each international market.

Zumiez's solid financial foundation has enabled them to manage volatility while funding customer-centric initiatives aimed at serving their customers better. As Brooks highlighted, the company's job is to meet consumers where they are and continue to move with them in this important stage of their life.

As we look ahead to the third quarter, Zumiez appears poised to navigate challenging market conditions while capitalizing on growth opportunities globally. Their strategic priorities and commitment to customer-centricity position them for success in a rapidly evolving retail landscape.