• Net income down 25% in Q3
  • Nine-month sales down 2.8%
  • Improved margins

Action sports retailer Zumiez Inc has posted third quarter net income below that of last year but ahead of its expectations, with net sales slightly down.

During the third quarter ended 31 October the retailer posted net income of $5.1m, versus net income of $6.8m in the third quarter of the prior fiscal year.

Total net sales for the third quarter increased 0.8% to $113.2m from $112.2m in the prior year quarter. The company reported same-store sales down 8.0% for the period.

Total net sales for the first nine months decreased 2.8% to $275.2m from $283.2m reported in the prior year period.

The company posted net income of $0.3m in the first nine months of fiscal 2009, compared to net income in the first nine months of the prior fiscal year of $10.9m. Results for the first nine months of fiscal 2009 include a charge of approximately $1.3m, associated with the proposed settlement agreement of a previously disclosed lawsuit.

In April a shareholder litigation against the management of Zumiez was quashed by a court ruling.

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Same-store sales decreased 13.6% in the first nine months of fiscal 2009, compared with a decrease of 3.2% for the first nine months of 2008.

Rick Brooks, chief executive officer of Zumiez, said: "I want to credit our entire team for our better than expected third quarter performance. By carefully managing our inventory, working closely with our branded and private label vendors to design programmes that would deliver improved merchandise margins, and finding ways to inspire consumers who visited our stores, we were able to exceed our initial third quarter expectations and saw a meaningful improvement in our same store sales trends relative to the first half of fiscal 2009."

The company introduced guidance for the three months of net income of approximately $0.18 to $0.22 per diluted share, based on an anticipated same-store sales decline in the high-to-mid single digit range for the fourth quarter of fiscal 2009.

Click here to view the retailer's full third quarter earnings statement.