Good afternoon, ladies and gentlemen, and welcome to Zumiez Inc. Fourth Quarter Fiscal 2025 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 Inc.'s business outlook and contains forward-looking statements. These forward-looking statements and all other statements that may be made on this call 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. You may begin.

Hello, and thank you, everyone, for joining us on today's call. With me today is Chris Work, our Chief Financial Officer. I'll begin with remarks about our fourth quarter performance and the successful holiday season we just completed before reflecting on our strong full year 2025 results and discussing our strategic priorities. Chris will then take you through the financials and our outlook for fiscal 2026. After that, we'll open the call to your questions. We're pleased with our fourth quarter results, which capped off a second consecutive year of important progress for Zumiez. Q4 results were highlighted by robust full price selling in North America during the important holiday season, which fueled mid-single-digit comparable sales growth in the region and meaningful gross margin expansion. In addition, the work we've done focused on assortment and full price selling in our European business drove 660 basis points of year-over-year product margin improvement. This, coupled with disciplined expense management, resulted in 380 basis points of operating margin growth despite sales being down high single digits year-over-year in local currency for the quarter. Our performance in both regions reflect the continued effectiveness of our full price selling and cost saving strategies even as we faced regional headwinds. From a category perspective, men's led our positive comparable sales growth during the holiday period, followed by women's, accessories and hardgoods. This broad-based strength across multiple categories validates our merchandising approach and the investments we've made in product newness and private label expansion throughout the year. Reflecting on fiscal 2025, we took important steps towards returning to historical levels of sales and earnings. Our merchandising assortments and customer experience initiatives generated positive content every quarter, means from low single digits to high single digits and a 4.3% comparable sales gain for the year on top of…

Thanks, Rick, and good afternoon, everyone. I'm going to start with a review of our fourth quarter and full year 2025 results. I'll then provide an update on our first quarter to date sales trends before providing some perspective on the full year. Net sales for the fourth quarter of 2025 increased 4.4% to $291.3 million compared with $279.2 million in the fourth quarter of 2024. Comparable sales were up 2.2% for the quarter. As Rick mentioned, the primary driver was our North America business, which showed outsized strength even as macroeconomic uncertainties spurred by global trade policy continues. For the fourth quarter, North America net sales were $224.4 million, an increase of 4.8% from 2024. Other international net sales, which consists of Europe and Australia, were $66.9 million, up 3% from last year. Excluding the impact of foreign currency translation, North America net sales increased 4.6% and other international net sales decreased 7.1% year-over-year. Comparable sales for North America were up 5.5%, marking the eighth consecutive quarter of comparable sales growth in this region. Other international comparable sales declined 7.5% in the fourth quarter. From a category perspective, men's was our largest positive comping category, followed by women's, accessories and hardgoods. Footwear was our only negative comping category. The consolidated increase in comparable sales was driven by an increase in dollars per transaction, partially offset by a decrease in transactions. Dollars per transaction were up for the quarter, driven by an increase in average unit retail and an increase in units per transaction. Fourth quarter gross profit was $111.4 million compared to $101 million in the fourth quarter of last year. Gross margin was 38.2% of sales for the quarter compared with 36.2% in the fourth quarter of 2024. The 200 basis point increase in gross margin was primarily…

[Operator Instructions] Our first question comes from the line of Mitch Kummetz with Seaport.

Let me begin with Europe. I just want to better understand what's going on there. In the fourth quarter, other international was -- I think it was a negative 7.5% comp. And I know that you guys shifted your focus to more full price selling in the quarter. And now I think, Chris, you said you're running up 13.2% quarter-to-date for other international. So did something change in terms of the full price selling focus? Or was it just not -- were you not lapping that issue in, like, quarter-to-date? Help me understand why we're seeing such a big swing in the comp performance from fourth quarter to Q1 to date in other international. I assume it's Europe that's driving that.

Yes. Thanks, Mitch. And you are right in your assumption. This is Europe that's driving it. I think as you know, Mitch, following as closely as you have, I mean, we started this kind of change in strategy in late 2024, really trying to kind of reimagine what was happening in Europe as we were growing at quite a clip, but not getting to where we wanted to be from a profitability and cash flow perspective. So our determination at that time was really to slow growth and focus on growing the core business and driving to profitability and cash flow. As you know, things don't move as quickly as you like sometimes, but the team put a plan together. It included some change of people within the entity, and that took some time to kind of gain traction. So as we moved across 2025, we saw that business shrink from about $135 million to just under EUR 135 million, I should say. This included, across 2025, product margin growth of 250 basis points with Q4 up 660 basis points. I think a big win for us as we really reimagine the product portfolio and how we are buying inventory. Even though sales were down pretty meaningfully in Q4, high single digits, we still saw $1.8 million of operating profit growth on the back of really strong full price selling and expense control. And this is really despite a pretty soft winter overall for Q4. So -- also really focused on inventory management, more relevant product. And I think it put us in a spot to start 2026 just in a way better position than we were a year earlier. As you mentioned, we have just under 90 stores now operating in 9 countries. 2026 is off to a really…

And then as far as the comp guide for the quarter, I think you said a 2% to 4% comp. Quarter-to-date, you're running plus 7.5%. I know February is a fairly small month. But why are you anticipating worse comp performance over the balance of the quarter? And then, maybe as you address that question, can you also maybe speak to what you're seeing in terms of like tax refunds so far? And then, how are you thinking about higher gas prices potentially impacting your consumers?

Yes. All good questions. Let me start with kind of the guide, but I think these are going to sort of blend together. Obviously, we had a great February really across the business. International, we just spoke about. But North America was very strong, too, up 6% comp across the 4 weeks of February. I'll tell you, as we started to see the global conflict unfold, we did see some softness in week 5 and have kind of guided the business into what we saw as a slowdown from where we were in February. And so, while still positive, we just saw some softness in the business, and that's how we plan the quarter to come out. Now whether that's tied to rising fuel prices and a little bit of uncertainty in the macro environment, I think that's to be determined, and we just need more time to figure it out. But in relation to putting the guide together and how we saw our comp guide, this is really about kind of looking at what's our current run rate sort of post-February and drawing that out across the rest of the quarter.

Our next question comes from the line of Richard Magnusen with B. Riley.

So first off, it looks like your private label penetration was strong in Q4 at around 30%. But during the holiday season, did you notice any change in certain categories regarding the performance of private label versus the branded products? Or was it pretty much the same trends in different categories that you saw throughout the year?

I'll start, Richard, and then Chris can add in, but -- to give you some context, but I don't think we saw any major changes. There are certain categories that are really, really, really dominated by our private label or own brands. And so sometimes it's hard to compare the branded portfolio versus our private label brands. And so I think each of them are targeting a different segment of our business. And so I don't think I would call out any significant trend direction changes from a private label perspective that I can think of in terms of the category performance for the brands that they performed well. But we also had some new brands that have performed really well, too, on the branded side. So I think it's a combination of both. And the new brands tend to be more focused on the T-shirts and fleece and hats in the more screenable portion of the business. So I think the private label is more dominated by the pants departments within the business. So they're kind of a bit separated in that sense, but both, I think, have done well, contributed positively in Q4.

Okay. And then my last -- second question is that Easter looks like just over 3 weeks away. Can you -- what can you tell us about your expectations of timing regarding your spring assortment and any observed consumer preferences and the impact of recent weather in different parts of the U.S. and the cadence of promo around Easter weekend?

Sure. I'll kind of take a crack at it as this kind of falls into our planning arena and let Rick talk. Obviously, Easter has pulled up. So we are -- have started our -- putting our product out in a way that will take advantage of that, obviously, and planning the business to have a little higher bump in the middle part of the quarter versus a little bit later in the quarter. So we're certainly planning on that. Richard, from a promotional perspective, this is just not really our game. We try to stay really full price and full margin. I think you see that within our product margin results here across 2025 and really the last few years as we've really been able to grow product margin, and that's not just our private label business, that's our branded business as well, really working with our partners to refine this. So I don't see anything specific there. We do have a variety of, what I would call, sort of spring season initiatives that, as you would imagine, would play into the gift giving that happens around Easter, but also just into what you would expect from a seasonal floor set. So I'm not going to go into those in detail either. That's kind of part of our product and secret sauce, but we're always trying to bring new in. I think that's what the customer wants. That's what we're really happy we've been able to provide within private label. And it kind of add on to your last question, too, of what we're going to do in our branded portfolio. I mean our branded -- our top 20 brands really continue to gain traction this year as a percent of the total business, which we view as a good thing. I mean we go through these cycles where our biggest brands will kind of ebb and flow. And sometimes they disaggregate and we bring on a lot of new brands and other times they aggregate and hopefully, that leads to really strong results as they grow in breadth and depth, right? So I think all those things are playing into the business. You see it really across all of our categories, whether we're talking about Q4 or whether we're talking about February, we're up with the exception of footwear. Footwear continues to be the one area of challenge for us, but that's our model. So we're really excited to be running a total comp and obviously running a big portion of the business positive.

[Operator Instructions] Our next question comes from the line of Marcus Belanger with William Blair.

I'm on for Dylan Carden. I just wanted to ask a follow-up to an earlier question about international. Obviously, you've seen a lot of volatility in that area. Can you tell me what you guys are doing to stabilize the area and have greater visibility into future growth? And then I have a follow-up.

Yes. I'll just -- I'll kind of add on to my earlier comment and let Rick jump in if he has anything to add. I mean I think, like all of our business, it really does start with product. So as we thought about reimagining the business at the end of '24, part of it was slowing growth just to make sure the focus was really laser-focused. But it was about looking at products and saying, how do we see trends, see where that customer is at, see who that customer is and bring it to them in a way that they will adapt to and they'll be excited about. And of course, we can sell it at full price. So this was really about rethinking that, really starting to look at our assortments and who we are carrying and how we are carrying them and what they were saying to the customer and starting to push that into the business in a different way than we've been doing. Obviously, as you can imagine, that takes time when you buy seasons ahead of time. So for us, we knew in the turnover at the end of late 2024 that it would be sort of a back-to-school holiday time period where we start to see this take shape. And we were pretty encouraged by some of the early areas we reimagined in that and what those meant going into Q4 and then some of those same items that we were dropping even late into Q4 that we're driving into the 2026. So it's really about product. I mean there's a huge part of execution beyond that of your store environment and the people in stores and how they bring the product to life. We continue to invest in that. We continue to invest in our teams there, just like we do here in North America. I mean this is really about driving a human-to-human relationship, right, of how you connect with your customer and how you talk with them. And so that's been part of what we've driven as well. And we think when you have the right product and you can bring it to them in a way that you really connect with them, I think that drives a different experience and hopefully one that brings that customer back again and again.

I'd just add that -- again, just for context, I think we have looked deeply at every other -- every area of our business in Europe. And as Chris said earlier, that we made some personnel changes in terms of some of the leadership in Europe and now we're leading particularly in some really key areas. And we're just leaving no stone unturned as we revisit every aspect of what we're doing. And again, I'm really encouraged, as Chris has laid out, with the Q4 performance. I'd just highlight again that, that was against a very -- one of our worst snow years ever in Europe, and we have a very dominant position in the snow retailing business in Europe. So despite the difficult snow year, we still were able to improve the bottom line results by a pretty good amount. So we're really encouraged. I think we're heading in the right way. But as Chris said, we have a long ways to go and a lot of work to do and more work to come. And we're very, very focused on making sure that we are continuing to improve the assortments, bring newness into the business, make sure that we're really delivering great experience for customers and commercializing our offering as we think about delivering to customers across all channels.

For stores, where are you guys in terms of how many more years maybe do you guys think about closing stores? And then, for the new stores that you are opening for this year, it looks like you're going to open up 5, how are -- over the last couple of years, how have those new stores been performing? Are they at a higher -- mature? Do you think that they're going to hit a higher sales per store maturity curve than your other stores? Just any comments on basic productivity for the first year or 2 years for your new stores?

Yes, sure. And let me -- I'll talk about new stores real quickly and then we can talk about closures. I think this is really -- I would say, post-pandemic, you've seen our store openings slow from historical levels, which we kind of knew was going to be part of it, obviously, with North America more built out and international being our area of further growth over the last few years. As we've talked about here on the call today, we have slowed international just from a standpoint of really focusing on profitability and cash flow. So the store opening cadence is much less. I think when you think about opening approximately 5 stores a year in North America, the last few classes of stores have been really good. We've been able to be selective in where we're opening and really try to fill markets or fill opportunities we wanted to get into for a long time. There's still a lot of -- a fair amount of good assets in the country that we want to get in. We just have to find that right fit, right, that right location within the mall at the right economics that makes sense for us to be able to invest. And I'm quite happy with how the real estate team and our store operations team has performed here in the last few years in our openings and each class having more winners than tougher situations. So that's a really good thing. From a closure perspective, we started more significantly closing stores in 2023. And then in 2024, a few more. And last year was around 17. We are forecasting we'll be ahead of that 17 number this year, although, I'll tell you, these are forecasts. You're never quite sure what's going to happen…

I'd just add in that -- again, with a little bit longer context, as Chris said, 10, 15 years out. What we're seeing in the U.S. is actually finally the end of, I think, the final leg on a bunch of mall locations at the lower end C- and D-volume mall locations, where we had traditionally been able to make some money, but now they've just got to the point where they're just not working anymore. But the important point in this is that, as you saw in our results in '24 and '25, where we closed units, total sales grew in North America. So what we're really talking about is how customer behavior has changed and moved to different centers within the trade areas. And I think that's -- this is kind of a long-term tail of playing out of -- that our malls are winning and the lesser malls are finally really losing to the point of closure. And we're often one of the last retailers to leave in some of these centers. And -- but it's not about per se sales declining; it's about how customers are moving to the better retail experiences in the stronger and better malls.

Ladies and gentlemen, I'm showing no further questions in the queue. I would now like to turn the call back to Rick for closing remarks.

All right. Thank you again for all of your questions today, and we always appreciate your great interest in what we're doing and the progress we're making towards building back towards our historical profitability levels. And as I said earlier, I really want to thank everyone on our team and our partners and our brand partners and the support as we really drive better results. So much appreciated from everybody, and we'll talk to you again in June. Thank you.

Ladies and gentlemen, that concludes today's conference call. Thank you for your participation. You may now disconnect.