Zumiez Inc. (NASDAQ:ZUMZ) Q2 2023 Earnings Call Transcript

And I think as we look at SG&A overall, for 2023, we won’t see huge growth. What we’ll see is some of the inflationary pressures that are really hitting lots of people in the industry.

Mitch Kummetz : Okay. Thanks, again.

Operator: And we have our next question will be coming from Jeff Van Sinderen of B. Riley. Your line is open.

Jeff Van Sinderen : Hi, everyone. Wonder if you guys could talk a little bit about what you’re seeing in the sales and margin performance of your private-label product.

Chris Work: Yes. I’ll go ahead and talk about it just kind of from a number’s perspective and obviously, welcome Rick to chime in. I think one of the things we’ve talked about throughout this year is our consumer really seeking value. And we are — I think we’ve seen that in the external market, it’s clearly — surely been clear in our business too. Private label as a percentage of the business has continued to climb. We’ve seen it from 2022 — throughout 2022 and now into the first quarter and second quarter of this year and then pretty substantially here in the third quarter to date, which you’d expect in back-to-school and where we’re at. And I think we are really proud of our teams and how they have executed here because while there’s certainly a value play here, I think our teams have also done a really good job bringing great product to market.

So, we’ve seen that really resonate both in our tops and bottoms business, but in other areas as well, but that’s the primary drivers on the apparel side. So overall, I think seeing really good private label trends. I think we’ve been able to do some things with bundling and packages in our stores related to private label as well, which has been beneficial. And we’re also seeing the growth internationally, too. And so, we’re encouraged by that with some of the brands really working in Europe. And our Fast Times and Australia team also has some private label that they’re pushing as well. So overall, I think we’re pretty encouraged by what we’re seeing in that area of the business.

Rick Brooks: And I’d only add, Jeff, that I think this — what Chris has just described is what’s driving. And the success of our bundling promotions is what’s driving the UPT gains, and that’s why I’m so proud of our sales teams is that they’re using that with our customers coming in the door. And we generated not only how we had the AUR gains to continue, but we’ve seen, again, UPTs start to increase in back-to-school, which is, I think, a credit to our team sales team to put those bundles, to sell those bundles and to have some of our highest now dollars per transaction, I think ever at back-to-school, which I think speaks well to how we’re positioned with our core consumer.

Jeff Van Sinderen : That’s helpful. Just as a follow-up to that, and I don’t know — I’m not sure you really break this out often, but just wondering if there’s any color you can give us on kind of where the concentration of private label is running at this point.

Chris Work: Yes. I can speak to that. We are about 21.5% through the second quarter compared to about 17% last year. So, it’s about a 450 basis point increase year-over-year as a penetration of total sales.

Jeff Van Sinderen : Okay. Interesting. And then I have sort of an off-tick — off question for you guys. But I’m just wondering how you’re handling getting people back to the office at this point. I know that out there, we’re hearing some resistance. What’s your latest policy to get folks back to the office?