Zumiez Inc. (NASDAQ:ZUMZ) Q2 2023 Earnings Call Transcript September 7, 2023 5:00 PM ET

Company Participants

Rick Brooks - CEO

Chris Work - CFO

Conference Call Participants

Mitch Kummetz - Seaport

Jeff Van Sinderen - B. Riley

Corey Tarlowe - Jefferies

Operator

Good afternoon, ladies and gentlemen, and welcome to the Zumiez's Inc. Second Quarter Fiscal 2023 Earnings Conference Call. [Operator Instructions]. 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 would like to turn the call over to Rick Brooks, Chief Executive Officer. Mr. Brooks, the floor is yours.

Rick Brooks

Hello, everyone. And thank you for joining us on the call. With me today is Chris Work, our Chief Financial Officer. I'll begin today's call with a few remarks about the second quarter and the start of the back-to-school season before handing the call over to Chris, who will take you through the financials and some thoughts on the third quarter and the rest of the year.

After that, we'll open up the call to your questions. As you forecasted back in May, our results have continued to track below prior-year levels. That said, our second quarter sales improved from the previous quarter trend line and finished ahead of our guidance. The operating environment in the U.S. remains challenging with significant multiyear inflationary impacts weighing on consumer discretionary spending, continued competition with spending on travel and experiences, and higher levels of discounting to clear excess inventories.

While this backdrop does not set up well for our full-price selling model, we know from experience that these down cycles are temporary. And, our focus is on best positioning the business to capitalize on market conditions as market conditions improve. This means staying close to our customers, adjusting our assortments to ensure we have diverse and differentiated merchandise they seek, and providing the world-class customer service they've come to expect from us.

While we're not where we want to be from a results perspective, we made progress in the second quarter. And, the work we've done this year against the plan we outlined in our earnings in March has positioned the business for further improvement in the second half of 2023. The sequential moderation in our sales trend in Q2 has continued in the third quarter as we move into the back-to-school season and higher volumes.