American specialty apparel retailer Zumiez has reported net loss of $51 million for the fourth quarter, compared to net income of $17.3 million in the prior-year period.
The company, which has 25 stores in Australia, posted flat net sales, which were up only 0.6 per cent year on year to $429.3 million.
For the full year, net sales dropped 8.6 per cent to $1.3 billion. The company swung to a net loss of $95.3 million from net income of $31.9 million in FY22.
The results reflect a goodwill impairment charge of $62.6 million related to the firm’s decision to slow store growth and focus on profitability in Europe.
“While we are encouraged by our stronger-than-anticipated fourth quarter and sustained quarterly improvements as we moved through the year, the global operating environment remains challenging and therefore we are further adjusting our strategies to balance the interests of our shareholders and customers,” said Rick Brooks, CEO of Zumiez.
Aside from slowing store growth in Europe, the company will continue to close underperforming stores in the US and reduce labour costs to align with lower revenue levels.
“At the same time, we’ll invest to ensure we are winning with the consumer by launching new, highly sought-after brands, maintaining our best-in-class service levels, and strengthening our customer connections,” added Brooks.
As of March 2, Zumiez operated 753 stores in the US, Canada, Europe and Australia. The company plans to open 10 new stores in FY24, including four stores in Australia.
