Investment Thesis
Zumiez is operationally unprofitable with persistent losses (-7.9% operating margin) and critically, is burning cash with negative operating cash flow of -28.1M despite modest 4.5% revenue growth. The company's sustainability is at risk as current cash reserves will deplete at the current burn rate unless profitability improves materially.
Strengths
- Modest revenue growth of 4.5% YoY despite retail sector headwinds
- Reasonable gross margin of 31.7% indicates adequate product pricing power
- Low leverage with debt/equity of 0.01x and only 1.9M long-term debt
Risks
- Negative operating cash flow of -28.1M is unsustainable and indicates structural profitability issues
- Persistent operating losses (-15.2M) and negative net income (-13.3M) with negative margins across ROE and ROA
- Free cash flow of -29.8M with 66.9M cash reserves means only ~2-3 years of runway at current burn rate
- Quick ratio of 0.97x suggests working capital stress despite adequate current ratio
Key Metrics to Watch
- Operating cash flow trend and path to positive OCF
- Operating margin improvement and expense ratio management
- Cash runway depletion rate relative to balance sheet reserves
- Same-store sales growth and gross margin sustainability
Financial Metrics
Revenue
193.3M
Net Income
-13.3M
EPS (Diluted)
$-0.82
Free Cash Flow
-29.8M
Total Assets
618.7M
Cash
66.9M
Profitability Ratios
Gross Margin
31.7%
Operating Margin
-7.9%
Net Margin
-6.9%
ROE
-4.3%
ROA
-2.1%
FCF Margin
-15.4%
Balance Sheet & Liquidity
Current Ratio
1.95x
Quick Ratio
0.97x
Debt/Equity
0.01x
Debt/Assets
50.6%
Interest Coverage
N/A
Long-term Debt
1.9M
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-06-06T07:57:41.858616 |
Data as of: 2026-05-02 |
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