Zumiez had a great quarter ended August 3 (remember I don’t write until I have received and digested the 10-Q). They did it with sales that rose just 4.3% from $219.0 in last year’s quarter to $228.4 million in this year’s. But they also increased their gross margin from 33.1% in the same quarter last year to 33.8% in this year’s quarter. And their selling, general and administrative expenses as a percent of revenue declined from 30% to 28.7%.
The bottom line was a net income that more than doubled from $4.38 to $9.03 million. They’ve got an imminently solid balance sheet. Combined with improved margins and reduced expenses over a modest revenue increase and you end up with a great bottom line.
More on that later. You’re probably wondering what I mean by an agnostic moat. If not, I wasted a lot of time coming up with that title.