Executive Summary

Q4 delivered improved profitability despite choppy holiday demand: net sales $279.2M (-0.9% YoY on a 13-week vs 14-week comp), gross margin up 190 bps to 36.2%, operating margin 7.2%, diluted EPS $0.78 versus ($1.73) last year (prior year included a $41.1M goodwill impairment) .
Versus S&P Global consensus, Q4 results were essentially in-line: EPS $0.78 vs $0.785 estimate and revenue $279.2M vs $279.4M estimate; two estimates were captured for both EPS and revenue* [GetEstimates; Values retrieved from S&P Global].
Q1 FY2025 guidance introduced: net sales $179–$183M, comps +3% to +5%, operating loss of $(16.5)–$(18.5)M, EPS loss $(0.72)–$(0.82); product margin expected down slightly to flat; management refrained from full-year guidance but expects sales and operating margin growth in FY2025 .
Catalysts: continued gross margin expansion (private label strength, lower discounting), SG&A discipline, and a $25M buyback authorization may support sentiment; tariff exposure and a guided Q1 loss are near‑term headwinds .

What Went Well and What Went Wrong

What Went Well

Gross margin expansion drove operating improvement: Q4 GM 36.2% (+190 bps YoY) on +160 bps product margin and +30 bps web shipping cost benefit; operating margin rose to 7.2% from a prior-year operating loss .
Category strength: women’s was largest positive comp, followed by men’s and footwear; dollars per transaction increased, aided by higher average unit retail .
Strategic progress: private label reached nearly 28% of FY sales (vs 23% in 2023 and 11% five years ago), with 120+ new brands launched in 2024; management emphasized staying nimble amid choppy demand .

What Went Wrong

Holiday softness: mid‑to‑late December North America sales fell short of plan, prompting January guidance cuts for Q4 (revised to net sales $275–$277M, EPS $0.72–$0.77) .
Inventory elevated: year‑end inventory +13.8% YoY; ~$7.4M pulled forward ahead of tariff implementation and residual holiday shortfall left levels higher than preferred .
International headwinds: other international net sales declined 6.4% YoY in Q4; Europe’s FY comps down 4.1% despite Q4 turning positive (+3.7%) .

Financial Results

Quarterly Progression (oldest → newest)

Metric	Q2 2025	Q3 2025	Q4 2025
Revenue ($USD Millions)	$210.2	$222.5	$279.2
Diluted EPS ($)	($0.04)	$0.06	$0.78
Gross Margin (%)	34.2%	35.2%	36.2%
Operating Margin (%)	(0.2%)	1.1%	7.2%

Year-over-Year Q4 Comparison

Metric	Q4 2024 (14 wks)	Q4 2025 (13 wks)	YoY Change
Revenue ($USD Millions)	$281.8	$279.2	(0.9%)
Diluted EPS ($)	($1.73)	$0.78	+$2.51
Gross Margin (%)	34.3%	36.2%	+190 bps
Operating Margin (%)	(11.6%)	7.2%	+1,880 bps

Note: Q4 2024 included a noncash goodwill impairment charge of $41.1M related to Europe .

Actual vs Consensus (Q4 2025)

Metric	Actual	Consensus	Surprise
Revenue ($USD Millions)	$279.2	$279.4*	($0.2)
Diluted EPS ($)	$0.78	$0.785*	($0.005)

Values retrieved from S&P Global.

Regional and KPI Breakdown (Q4 2025)

Metric	Q4 2025	Commentary
North America Net Sales ($M)	$214.2	+0.8% YoY; comps +7.2%
Other International Net Sales ($M)	$65.0	(6.4%) YoY; comps +1.9%
Consolidated Comps (%)	+5.9%	Third consecutive positive quarter
Dollars per Transaction	Up	Higher average unit retail; units per transaction down
Q1-to-Date Comps (%)	+4.3%	NA +6.4%; Intl (3.7%)

Category Highlights (Q4 2025)

Category	Comp Performance	Notes
Women’s	Largest positive	Continued momentum since Q1
Men’s	Positive	Fifth consecutive quarter
Footwear	Positive	Third quarter in a row
Accessories	Negative
Hardgoods	Negative	Skate pressure; snow offset

Guidance Changes

Q1 FY2025 Guidance Introduced

Metric	Period	Previous Guidance	Current Guidance	Change
Net Sales ($M)	Q1 FY2025	N/A	$179–$183	Introduced
Comparable Sales (%)	Q1 FY2025	N/A	+3% to +5%	Introduced
Product Margin	Q1 FY2025	N/A	Down slightly to flat YoY	Introduced
Operating Income ($M)	Q1 FY2025	N/A	$(16.5) to $(18.5)	Introduced
Diluted EPS ($)	Q1 FY2025	N/A	$(0.72) to $(0.82)	Introduced
Tax Rate (Q1)	Q1 FY2025	N/A	~10% benefit of pretax	Introduced
Store Openings	FY2025	N/A	~9 openings (6 NA, 2 EU, 1 AU)	Introduced
Capex ($M)	FY2025	N/A	$14–$16	Introduced
Full-year Effective Tax Rate	FY2025	N/A	~60–70%	Introduced

Q4 FY2025 Guidance Progression and Outcome

Metric	Period	Initial Guidance (12/5/24)	Revised (1/13/25)	Actual	Change
Net Sales ($M)	Q4 FY2025	$284–$288	$275–$277	$279.2	Lowered then modestly above revised high-end
Diluted EPS ($)	Q4 FY2025	$0.83–$0.93	$0.72–$0.77	$0.78	Lowered then above revised high-end

Earnings Call Themes & Trends

Topic	Q2 2025 (9/5/24)	Q3 2025 (12/5/24)	Q4 2025 (3/13/25)	Trend
Product assortments/new brands	Refined apparel/footwear; back-to-school strong	Momentum in apparel/footwear	120+ new brands added in 2024	Improving
Private label mix	Ongoing expansion	Noted strength	~28% of FY sales (vs 23% 2023, 11% 5 yrs ago)	Expanding
Gross margin drivers	+250 bps in Q2 on mix/shipping	+140 bps in Q3	+190 bps in Q4 (product margin +160 bps; shipping +30 bps)	Improving
SG&A/Cost discipline	Share repurchases; operating improvements	Operating margin inflection	SG&A 29% (down 1,690 bps YoY incl. prior-year impairment)	Improving
Supply chain/tariffs	Calendar shift effects	Pulled receipts ahead of tariffs	China sourcing ~50%; diversifying; $7.4M inventory pull-forward	Managing risk
Regional trends	NA strength in July	NA-led acceleration	Q4 NA comps +7.2%; Intl comps +1.9%; FY EU comps (4.1%) with Q4 +3.7%	NA strong; EU stabilizing
Inventory management	Builds for seasonality	Elevated into holiday	Year-end inventory +13.8% YoY; quality of inventory; margin plan	Elevated but planned
Store fleet actions	Plan ~9 opens, ~25 closures (FY24)	~33 closures in FY24	Closed 31 underperformers in 2024; plan ~20 closures in 2025	Rationalizing

Management Commentary

“We delivered a substantial improvement in fourth quarter operating profitability driven by significant gross margin expansion and a meaningful reduction in operating expenses… This unexpected choppiness is indicative of the environment… Our plan for 2025 is to stay the course… while staying nimble and financially flexible to deliver enhanced profitability.” – Rick Brooks, CEO .
“Operating profit more than doubled to $20 million and EPS increased 95% to $0.78 after adjusting prior-year numbers for the… goodwill impairment… This improvement reflects the successful execution of our strategic initiatives.” – Rick Brooks .
“Private label… reached nearly 28% of total sales for the year, up from 23% in 2023 and compared to 11% just 5 years ago.” – Rick Brooks .
“The 190 basis point increase in gross margin was primarily driven by 160 basis points of improvement in product margin and 30 basis points of benefit in web shipping costs.” – Chris Work, CFO .
“We anticipate loss per share will be between a negative $0.72 and negative $0.82… For the first quarter… Comparable sales… between 3% and 5%.” – Chris Work .

Q&A Highlights

Tariffs and sourcing: ~50% of North America receipts were from China exiting FY2024; plan to meaningfully reduce in 2025 by diversifying production; inventory was pulled forward ahead of tariffs .
Leverage and flow-through: Management expects gross margin leverage (product margin, occupancy, distribution) and SG&A growth in line with sales; flow‑through could be “30%+” if sales exceed plan; operating margin can grow on a low-single-digit comp .
Tone: Cautiously optimistic given macro uncertainty; focus on margin expansion and disciplined expense management .

Estimates Context

Q4 FY2025 actual vs S&P Global consensus: EPS $0.78 vs $0.785; revenue $279.2M vs $279.4M—both essentially in-line; # of estimates = 2 for both EPS and revenue* [GetEstimates; Values retrieved from S&P Global].
Implications: Limited estimate revision pressure for Q4; Q1 guidance for a loss likely prompts near-term estimate recalibration lower for EPS, with potential offsets if gross margin continues to improve .

Key Takeaways for Investors

Margin story intact: Product margin and shipping efficiencies lifted GM and operating margin; management expects further margin gains in FY2025 as private label scales and discounts normalize .
Top-line steady but choppy: Q4 comps +5.9%; Q1-to-date comps +4.3% with NA strength; calendar effects and holiday softness highlight volatility .
Inventory/timeing: Elevated year-end inventory (part tariff pull-forward) should unwind; planning for product margin increases in FY2025 suggests confidence in mix quality .
Strategic mix: Women’s, men’s, and footwear momentum plus 120+ new brands and rising private label penetration underpin GM durability .
Cost discipline: SG&A leverage and store rationalization (31 closures in 2024; ~20 planned in 2025) support operating margin expansion even on low-single-digit comps .
Capital allocation: $25M repurchase authorization adds support; balance sheet remains debt-free with $147.6M cash and marketable securities at year-end .
Near-term trading lens: In-line Q4, cautious Q1 loss guide, and tariff narrative could cap upside near-term; sustained GM improvement and buyback are supportive on weakness .

* Values retrieved from S&P Global.

Citations: Q4 press release/8-K including financial statements ; Q4 call transcript ; Holiday sales update and guidance revision ; Q3 press release ; Q2 press release .

Zumiez Inc (ZUMZ)·Q4 2025 Earnings Summary