Good afternoon, ladies and gentlemen and welcome to the Zumiez Incorporated Fourth Quarter Fiscal 2013 Earnings Conference Call. At this time, all participants are in listen-only mode. We will conduct a question-and-answer session toward the end of this conference. Before I begin, I would 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 particular forward-looking statements and all other statements that maybe made on this call that are not based on historical facts are subject to risks and uncertainties and actual results may differ materially. Additional information concerning a number of factors could cause actual results to differ materially from the information that will be discussed is available in Zumiez’s filings with the SEC. I would now like to turn the call over to Mr. Rick Brooks, Zumiez’s Chief Executive Officer. Please go ahead, sir.

Thank you and welcome everyone. I am joined today by our Chief Financial Officer, Chris Work. Before I get started on my review of the quarter, I want to once again express my condolences to the families and friends of Brianna Benlolo and Tyler Johnson who as you know were victims of the terrible violence that ensued in our Columbia, Maryland store this past January. As you might imagine, given our culture here at Zumiez, the loss of two members of our tightknit team is felt organization-wide. While we struggle to understand, the motivations or the reasons behind this tragic event, we have done our best provide support and counseling to members of the Zumiez team and reached out to the victims’ families to offer our support during their time of incredible grief. Brianna and Tyler and their families remain in our thoughts. Turning to our fourth quarter results, as usual I’ll begin with some prepared remarks about the quarter and full year 2013 and then Chris will take you through our key financial and operating metrics. After that, we will open the call up to your questions. Earlier this afternoon, we announced fourth quarter sales of $227 million in line with our most recent projections. Earnings per diluted share for the fourth quarter were $0.89. Including these results, but not in our outlook were net benefits of approximately $0.26 per share for the reversal of accruals related to the Blue Tomato contingent earn-out, a correction of an error in accounting for leases, and a release of a valuation allowance benefiting the effective tax rate. Excluding these items and their impact on the fourth quarter, our earnings were slightly above our guidance range which can be attributed to expense management and a lower tax rate. With regard to reversal of…

Thanks Rick. Good afternoon everyone. As usual I will start with a review our fourth quarter and full year results. I will then outline our first quarter guidance and provide some thoughts on how we are thinking about fiscal 2014. Beginning with the fourth quarter results, fourth quarter net sales increased 1.1% to $226.8 million for the 13-week fourth quarter 2013 compared to $224.4 million for the 14-week fourth quarter of 2012. As a reminder the extra week last year was worth $8.9 million. By region North American sales decreased $1.6 million and the European sales increased $4.0 million in quarter. Comparable sales were down 2.2% in the fourth quarter including comparable e-commerce sales. In terms of category performance men’s, footwear, boys and hardgoods comped negative in the fourth quarter while accessories and juniors comped positive. During the fourth quarter of 2013, we added five new stores bringing our year end store count to 551, an increase of 10.6% compared with the end of fiscal 2012. Gross profit was $87.9 million in the fourth quarter of 2013, an increase of $2.2 million over the fourth quarter of 2012. Gross margin was 38.7% in the quarter compared to 38.2% in the year ago period. The increase in gross margin is primarily attributed to a $3.3 million correction of an error in the accounting for occupancy expense on a straight line basis worth approximately 140 basis points as a percent of sales. Our previous method had been recognizing too much expense in the early years of the lease. Excluding this benefit, gross margin would have decreased due primarily to de-leveraging effect of our occupancy expense on a negative comp. Consolidated product margins were down slightly in the quarter. SG&A expenses for the quarter were $47.6 million or 20.9% of net sales compared…

Alright. (Operator Instructions) And your first question comes from the line of Sharon Zackfia with William Blair. Please proceed.

Hi, good afternoon. A couple of questions I guess probably for Rick, I am just curious about stash, I mean obviously mall traffic has been really challenging, be interesting to know kind of where you stand on stash, I don’t know if you have ever talked about kind of the percentage of transactions that evolved stash at this point or do you feel like it has been successful in driving traffic during times when you needed at Zumiez?

Alright, thanks Sharon. The question on stash, we are pleased with our efforts on stash. I think the – as I have said I think on previous calls, our primary focus on stash has been to build the membership of the program at this point. We are in the process now Sharon of talking about how during 2014 we are going to be mobilizing to take advantage now of all the data we have been acquiring and that really gets into that CRM strategies customer communication strategies. So those are really I mean more focused for 2014 and 2015 than they all have been in 2013. So we are pleased with the progress we have made to-date, I will tell you that. I think we are – we added over a million members last year in the Stash program in 2013. So I am not going to share with you the percentage of transactions we have – but it’s a great question because it is how we measure it. So I appreciate it, but I am not going to share that aspect with you. I am going to say again that we feel good about where we are going. We feel good about the momentum of the program and we are now ready with we have accumulated enough of a base of consumers to really take the next step which is about effectively and communicating in highly relevant ways for this consumer base.

Okay. And then just a second question on new store productivity I mean are you happy with how the new stores are performing and have your thoughts around CMOs changed, I know they have been pretty fluid I don’t know where the six were that you closed but I am sure kind of updated thought process on I know you used to do really a lot on ABNC, I don’t know if that’s really altered for you?

Yes, thanks Sharon. It’s too early to tell completely on our 2013 stores. Our 2012 stores did come in within the metrics we had outlined and we still are looking in a range at different stores from ABNC perspective. I think when you think about the six stores that we did close this was both a closure as well as some repositioning as well as in the marketplace. So this is how we are going to look at things going forward as we continue to evaluate our stores overall and how we can best serve each marketplace in the way we are in.

I will just add Sharon that I think that we are as we said in the comments we are looking to actively manage the store portfolio base. So we do have our internal theories about which stores we ought to be particularly paying attention to and there is no clear simple answer to this just CMOs from that perspective because we have some CMOs in certain locations in the country where that’s these centered for a wide range a very big circle of commerce in that center. So those are centers frankly we are not concerned about at all they tend to be performing very well for us. It’s more I think we are looking at where those – where we may have over built metropolitan markets I think where most sensitive to watch and paying attention on what’s going on with the malls.

Okay, thank you.

Thanks Sharon.

Alright and your next question comes from the line of Edward Yruma with KeyBanc Capital Markets.

Hi, thanks for taking my questions. I guess first you kind of had inconsistent results through ’13 some month stronger than others. I think they were somewhat weaker in the February how do you think about the category for ’14 and kind of what are the changes you are making to help restore health in that important business?

Which business you want Ed?

Footwear?

Footwear, alright, thank you. I think I have to tell you at this point I would tell you I think that was going to be a tough category for the upcoming year. And both and I would tell you I think it’s both men’s and women I think they will be tough categories. And we are constantly working to drive trends. We are working with brands at every level of the business. We are looking for next styles. We are going to take some risk with product. We are looking for how we can have unique styles with our brand partners on the footwear business. So we are basically going to do everything we possibly can to try to improve our footwear business. But that being said I think it’s at least for the first few months here first few periods I think it will be a challenging business for us.

Got it.

And I will say that both men’s and women Ed.

Got it. And then just trying to understand a little bit the errors in the time for an expense, I guess how does that adjustment and prospective accounting treatment change COGS and SG&A going forward? Thanks.

Yes, great thanks Ed. Yes, there really is no change on SG&A as we record our lease expense all within the cost of goods sold line item. So as you think about it going forward we think about the error overall. This is something that accumulated over a period of time. And so as we consistently kind of go through our accounting policies and refresh where we are at. We identified that in the back half of 2013 and we did as we performed our analysis and looked at it both quantitatively and qualitatively. And there is an adjustment that we deemed not material or significant to any given quarter or year. However, it was large enough that we thought it warranted a call-out on fourth quarter results. So we went ahead and made the change. As many of you are aware with lease accounting, it is really a matter of straight-lining the expenses over the period of the lease. And we had certain expenses that we had included in the straight line expense that did not need to be in that. So we have corrected that and we will subsequently recognize that expense over the future remaining years of those leases, but don’t expect it to be overly material to any one period going forward either.

Great, thanks so much.

Thanks Ed.

Your next question comes from the line of Jeff Van Sinderen from B. Riley. Please proceed.

Good afternoon. Just a point of clarification, Chris, is it $0.24 the net impact on the quarter for the three benefits in one charge, is that correct?

That’s correct.

Okay. And then maybe you can just frame your planned promotional markdown levels on spring merchandise, I am not talking about the carryover stuff that I know you had to push out or you had to sell some of that in early Q1, just really focused on spring merchandise, where you think the promotional levels, the markdown levels are going to be this year versus last year? Any color there would be helpful?

Alright. I am glad to try to help you there, Jeff. I mean, again I would tell you at this point, our plans do not call for any what we classify at this point here as we begin spring if any plan markdowns, what was the way you are going to see in terms of our promotions are going to be bought for promotions, so for larger promotions. So at this point, it will all depend on how spring goes forward from here, but certainly our plan is that we are going to, we believe we have bought spring appropriately for where are at or how we thought about the season. We are seeing early reads on the product where we have better weather is fine. So we are not anticipating any unusual level of markdowns relative to prior periods on spring product.

Okay. And so the shift in the calendar, obviously you touched on March comps being weaker because of the shift in April comps benefiting, you don’t get the sense that because everybody maybe having a later peak selling period this year that promotions in the space might be more intense, any thoughts on that?

Well, I think promotions in the space will be more intense. They were all – it’s a great observation, Jeff, but I also like to point this out as one of our real differences in our business is they either way more intent to whole last year and way more promotional than our competitors have been, we have been in the marketplaces. As Chris, I think both said in our comments, we achieved peak product margins in for all of 2013 in North America. So we are not playing the game that everyone else is playing here. And a lot of what we have been doing is for – is planning the value of promotions we are offering to our consumers. So for this first quarter, I expect it to be incredibly promotional in the marketplace. We just have different strategies and we believe we have different tools to bring to bear. So our anticipation is that we – our plan at this point will be no more promotional and spring product than we were a year ago.

Got it. Well, you guys are very good at your promotional messaging, so we wish you the best of luck for the rest of the quarter. Thanks.

Thanks.

And your next question comes from the line of Steph Wissink with Piper Jaffray. Please proceed.

Thank you. Good afternoon everyone. Just a follow-up I think to the prior question which is a good one related to kind of merchandise margin. Rick, if I look at your business guidance of $160 million in rev, if I look at prior periods of that level of revenue, it seems like there was a bit more profitability passed through and it sounds like merchandise margins might be pretty consistent. So help us understand the delta between the profitability of $160 million today versus what it may have been historically? Has something that’s changed in the cost model that we should be considering in terms of the de-leverage effect on that level of revenues? Thank you.

I will let Chris take most of this, Stephanie, but I will just start off by saying a lot of as Chris I think said in his comments, we have some carryover product that we are liquidating through from the holiday season, winter carryover product and other items, footwear, for example, which we are liquidating our way through. So that is part of what the margin impact is that we have laid out I think for Q1. And then there is the de-leveraging aspect. I don’t know Chris you got anything you want to add to that?

Yes, I just think of as we look at this model, there really has been no change in the model that absent the unique charges that we call out we believe that our model should have leverage at some point of between 3% comp and a 5% comp. But as we – what we had experienced here over the last year and what we’re guiding to in the first quarter and a negative comp, we would not expect to leverage the model the way that we’ve been able to do historically.

Chris, could I just add a follow-up to that. If the leverage point is 3% to 5%, has there been internal discussion about how to reduce that leverage point if we do stay in this season of kind of low single digit to negative low single digit as a range?

Yes, I mean I think we’re always having those conversations and I think this is where we spend a lot of time internally balancing the investments that we believe are the correct investments for the long-term as we’re thinking about this business with the profitability in the short term and both are very important to us. And you see us do that in the way that we manage our product margin as well as our cost structure. So, it’s something that we do have a lot of conversations about and we’ll continue to balance those as we evaluate where the markets at.

And I guess I’d add to those comments Stephanie that if you look at the last year particularly our performance and trust me I don’t like relative performance measures but I think it’s important for us how to keep in mind that you look at our combination of sales performance a slight negative or a 3 negative comp for the year. And as we said peak operating or peak profit margins in the North American marketplace, there are few retailers that in this environment be able to put those two things together. So Chris is right we’re always looking to challenge ourselves in the cost basis of where we have an opportunity to cost out of the business. And we’re looking for those opportunities on both a structured basis as well as an (ad-hoc) basis, everyone has got any great ideas. So but I just want to put into terms for us that there is a relative perspective of how difficult particularly the teen especially retail world is right now. And we feel good making this argument for about five years now that we’ve been in a share consolidation world. And we think that is true for the next five years that this is a ball about share consolidation, winning share in the marketplace. And I think a great way to evaluate your success and doing that is the combination of top-line and your ability to maintain your product margin structure, pure product margin.

Thanks guys. Best of luck.

Alright. And our next question comes from the line of Dorothy Lakner with Topeka Capital Markets. Please proceed.

Thanks and good afternoon, everyone. I was just wondering – obviously there’s been a lot of discussion on many conference calls about the teen environment and how tough it is? And I wondered given how well you’re doing in this tough environment with the peak product margins and just maintaining a level of sales that’s pretty impressive really. I just wondered what you’re doing in terms of training, are there differences in the way you’re training stores so you’ve yet to handle what’s clearly become a much more challenging sales and traffic environment?

Great. That’s a great question, Dorothy. And thank you for asking it. Let me – I guess I would like to respond actually I’m going to broaden up my response a little bit for you.

Sure.

First I will address the training first is we haven’t changed anything we do on training. We continue to be incredibly intense about it, but that’s nothing new for us. That is our ongoing efforts to make sure that we have an engaging sales environment at every consumer touch point. And so this is something that we’ve been committed to for decades, we aren’t committed to it yet, it’s expensive I should add as we talk about Stephanie’s previous question and Chris said you have to know where you’re going to invest. Investing and training is a long-term payout and it’s not something you do one year and don’t do another, you have to be committed to doing it and we are committed to maintaining the pace and development of our training programs throughout the organization. Then in terms of broadening my response a bit I mean we’re very focused on trying to create great brand experiences at every consumer touch point in our business. So we’re clearly challenging ourselves internally and have been working over the last 18, 24 months to really challenge ourselves about every aspect of the business, every consumer touch point how we translate into Zumiez brand elements. What we define as always unique defining our quality that create the Zumiez an exponential brand experience. So we are working really hard as the team actually off sight today that is doing that exact project for their team. And we really want to challenge ourselves because it is one of the key differentiating aspects that Zumiez culture which training is a part of, but then this idea of executing is our brand definition at a higher level, Dorothy. And it is those two things I think are real long-term drivers of the business. If you have unique – if you have a unique brand and I think we do and we can define that well, clearly define it, clearly define what those elements are. And we can do that then you can really challenge yourselves about the higher levels of execution. And that’s what we are tempting to do in combination with our commitment to the culture at Zumiez. And that’s as I said, that’s where the training really comes into play again and as one of those key cultural pillars for us. So it’s a great question. We are focused relentlessly on how we are going to differentiate ourselves as a unique business model that is going to be tough to being commoditized. And that’s what we are doing. And we are working hard to do that and create really unique experiences for our customers.

Great, thanks. Thanks for all that color and good luck for the rest of the year.

Thanks, Dorothy.

Your next question comes from the line of Dave King with ROTH Capital. Please proceed.

Thanks. Good afternoon guys. I guess just first off, I want to follow up on one of the earlier comments on footwear and just kind of trying to hear some of your thoughts around where you think you mean you can take that? And without maybe going too much into the different brands and I understand that and I wanted to go there in specific styles, maybe you could just help us understand how you are thinking about it in terms of maybe larger brands versus smaller brands? Historically, I think that you have kind of gone towards some of those larger brands at least in the recent times. And just give us your thought process around that? And then is that going to be more core action, sports-oriented, or are there other themes that we should be thinking about as we are out in the stores? Thanks.

Right, thank you Dave. Again, I will give you a very short sweet answer to your question. We go, our customers take us. And we sell what customers want to buy and we try to do that on a localized store by store basis. So I know that, that probably doesn’t get exactly get at what you would likely hear from the – an answer to the question, but that’s the real root of great retailing. It is localizing the presence with the right brand mix at every location and following and what your customers tell you they want to buy. So we are going to work as I said, I mentioned a few things we are going to do and we are going to work hard to try to make footwear as good as can possibly be in terms of business for us. But I will also say that we have been through these cycles ups and downs and if it’s not footwear, if it’s footwear that’s tough, that you do something else that’s running gains. So we will look to maximize other departments. And I think we have been saying for a while that our skate hardgoods business has been good for a long time. Our women’s business continued to perform well. So we are going to look as part of your answer to your question about footwear is about how we are going to maximize performance in other aspects of the business. So that gets us back into talk about emerging brands and all sorts of other aspects of what we are trying to do. So may not quite get everyone, Dave, but that’s the reality of what we are trying to do which is trying to go our customers tell us and where they want to buy, where they want to spend their money with us. And we are trying to then do the best job we can on meeting their needs and doing that very on a localized store by store basis.

Right, that’s understandable and I appreciate that. I guess then maybe touching on one of your comments on the hardgoods space, Rick, maybe it’s just more helpful to some of us to understand just some of your big picture thoughts around, I mean, if we just look at data, for example, we look at action, sports and participation rates and you look at hardgoods, for example, it seems like there is less people skating, there is less people snowboarding, things of that nature but yet you guys are seeing some gains on that side and you talk about that being an area on a go-forward basis. What is it about that you guys are able to do to help continue to drive that? And is it you guys constantly evolving as there are specific things that you can point to anecdotes from the past, anything to help investors kind of understand what it is about you guys that really sets you apart?

Yes. And again just to be clear, I want to sure comment on skate hardgoods, because our snow hardgoods business was pretty tough again this year.

Okay, right, right.

So and I think it is a big distinction between those two businesses. I think what we do on skate is again the localization aspects are critical in skate. There is another case where I am having the right mix of brands at each location is a real critical aspect of what you are doing. The great thing, one of the great things about skate hardgoods Dave is its relatively quick turn business. And we are constantly bringing in new products, new screens on decks every week literally as we manage the business. So we do a very good job of preplanning our buys with our vendors giving them really good direction about what our needs are going to be and then working closely with them to get things and screens that are relevant for at that point in time. So I think we executed at a very high level. And I think our people in our stores are really great that’s they are getting the lifestyle and are really great at selling skate hardgoods. And then I will tell you that there is an element of share consolidation. This is another one of those areas that will harkens back to some of those broad themes and we can talk a lot about what drives share consolidation. The behavior of consumers in this modern world of smart devices, I think these are things which advantaged Zumiez in the marketplace. And I think we take strong advantage of our size and scale to meet the needs of our consumers. And I think skate hardgoods is one of those areas that we are very, very strong and you are seeing all those aspects I described, in addition you are seeing those aspects drive with the change in consumer behavior share consolidation of the market.

Yes, that helps. And then I guess kind of follow-up to that and also just a little bit of a broader question. In terms of share consolidation, obviously you have done well with that domestically and then looking at you kind of store guidance for next year its five stores like to have off of a pretty small base in Europe, but it’s still five stores I guess to what extent have you guys given any thought to accelerating that trajectory at any point given some of the challenges that you alluded to in your prepared remarks around Europe having it challenges. And then I guess also just on the store growth kind of how should we be thinking about that in terms of the overall number how much that’s closings versus gross openings? Thanks.

I will let Chris handle last part. I will talk a little bit about Europe and our plan there. And thanks for calling out that it’s five stores and a very small base, it’s a 12 store base, so it’s pretty that’s a lot of store growth to have in a marketplace. And we are always cognizant. Our goal is I mean if we try to build about 50 stores in Europe today it would be a disaster and that’s just never been our mode of operation. We want to grow and grow the culture and the team with the store growth. So we are being measured and I actually think five stores, it’s a little bit small base and then they are doubling the last year, but it’s still a significant growth level on that base of stores. So we want to make sure the main thing that and I think we have talked about this in previous calls, we are experimenting with different formats in Europe malls, street stores, different side street stores in different markets. And what we are really trying to make sure we are doing is we are going to build the right formats of stores in the right kind of markets. And so we are in a learning mode Dave with what we are trying to do there. And so you should think about I think five is being a relatively aggressive pace for us in Europe and that we are in a learning mode and we are going to stay in this learning mode to make sure that when we really do ramp it up we are going to ramp it up in a high quality and successful way for our business in Europe and our investors.

Great. And then in remarks 55 stores is our gross number that we plan to open this year. And where I think that we believe is advantage of our business model is that we still have room to grow. And we talked in the past about the U.S. being a 600 to 700 store chain and we continue to look at that on a regular basis. But we still fell like there is market and opportunities for us out there. And so we still have that room to grow. And as we think about it any potential closures and we are not going to talk about that today. But for us this is not – hasn’t been a significant number as you have seen in our historical results. And it really just comes down to the market-by-market analysis and so we are not planning anything significant for the year and because we want to maximize all of our assets in every market.

Alright, thanks. Good luck on this year guys.

Thank Dave.

Alright. And your next question comes from the line of Richard Jaffe with Stifel. Please proceed.

Yes, thanks very much. And Rick, a little bit more of a philosophical question if you don’t mind. E-commerce being an important part of your business and a growing part and the talk of mall traffic industry wide being on the decline, are you guys in a position to reconsider the traditional mall-based Zumiez and think about it differently whether you need to be more online, more alternative locations or I know you just restated your square foot aspirations, but wondering if that picture is changing your own mind, given what seems to be a change for this generation to visit the mall less frequently?

Thanks, Richard. And again, I was enjoying your philosophical questions. Keep asking them. Because then we can have some fun here in the conversation. Let Chris deal with all the boys that you and I can have philosophical questions. So we are thinking about these topics all the time. And on an ongoing basis, we are revisiting them not just within our formal long-term five-year planning process, but we are thinking about them throughout the year as we see results and we are tactfully talking about what do we need to adjust and why? And so we are all if you look back it’s on the shop effect data about mall traffic over the last two years, they are stunning numbers. But so I want to cover your question over a couple of ways and talk about kind of how we are thinking about these elements, Richard. So we are watching this and saying okay, we look over the last two years and we are actually running comp store sales gains in that timeframe. So really what’s happening is from our perspective is the omni-channel world. Customers are engaging with us differently, both parents and teens and we have to think about each of those consumers engaging with us differently themselves, right. Teens interact with us in a different way in the online world than the parents do. So we have to be very cognizant then of trying to again identify of being able to as best we can identify who the consumer is and making sure we are meeting their needs. It’s clear to us that many, many more people before they are pre-shopping using digital channels and then going to stores and we believe the conversion rates are much higher now. So yes, mall traffic is down over…

Yes. And then no customer is ready for more than yours, that younger guy or girl who has a smartphone and totally committed to shopping 24/7 or having that access 24/7?

That’s correct.

They want to see it from you and if they don’t?

They’ll go other places.

Yes, you lose exactly, exactly.

So we’re working on it really hard, we’ve been for the last few years. As we said our comments we think where we made significant progress but we have a lot more to do too.

That’s great. Thank you.

Alright. Your next question comes from the line of John Morris with BMO Capital Markets. Please proceed.

Hi, it’s actually Janine Stichter on for John Morris. I was just wondering if you could talk a little bit about the juniors business. It’s been so strong for you for so many years and I think you had the first negative month there in quite some time in January. So just wondering if you’re seeing any additional promotional pressures versus the rest of the mix considering what’s been going on in the teen space and just how you’re feeling about that business in general and where you think it could go as a percentage of sales go forward? Thanks.

Right. And again you’re going to hear the answer Janine Dave heard a little while ago which is our customers are going to allow – are going to tell us where we can go and our job is to take it to the highest level we can possibly take it for our consumer. So January was partly a reflection of just – it was difficult in every category of business and difficult for parts of the country to get out even shop and then we had to challenge another part of the country there wasn’t a good winter in fact they’re very poor winter which as you know even our women’s business we sell a lot of jackets and outer wear. So there is a number of factors about January that nothing was very good in January frankly. And but you’re going to have – you’re going to just have to ride with me in the comment that we’re going to do everything we can, the combination of great brands, great private label, how we use those two things together to sell a lot of products of junior consumers. I will also tell you think we’re benefiting from a cyclical shift probably to some consumers who are tiring of the vast fashion elements of the world. So I think that’s been a benefit for us as a branded retailer and we’re happy to serve those customers. So how high can we take it, customers would tell us that. Our job is to get there as fast as we can and continue building that business and that’s what our teams are working on.

And Janine I just add to that from a staff perspective. As you mentioned it has been an area and its driven growth for us. We’re now over three years and end of the year at about 12% which is just couple of years ago is 10% of our overall sales. So you can see the impact of that growth over the last couple of years.

Okay, great. And did you quantify the store closures for January?

No, we didn’t.

Okay.

Alright. And our next question comes from the line of Betty Chen from Mizuho Securities. Please proceed.

Actually it’s Alex Pham on for Betty. I was wondering if you guys could just maybe comment on how Canada is doing versus the U.S.? And then also how weather has been impacting most retailers any call-out on regional performance? And then just in regards to the men’s business maybe you can discuss a little bit more about sort of the competitive environment, it has been softener the men’s business for the past couple of quarters and maybe any plans that you have in terms of reinvigorating that category given that it is a good chunk of sales? Thanks.

Great. So I’ll start with the Canada side and the weather components. Overall we continue to work on growing Canada as you saw its open stores we ended the year just under 30 stores in Canada and continue to work that market. As you’d expect Canada like our European markets have some of the same trends as our U.S. market, so it’s been tougher. But we still feel like it’s a great marketplace for us, we’ve got a lot of good things working there. And we continue to invest in those teams and execute our strategy there to continue to grow Canada going forward. From a weather perspective, weather would trend very closely to what you would expect in the Midwest and the East as hard as they were hit with the storms there. They were our most challenged regions, but overall nothing significant to call out from an overall variation. Those were just our lowest performing regions overall.

And on the managed business, Alex, I mean again we are working hard, trust me and what we can do because as you said it is the biggest part of our business. We have had a great run and then so up to the last 18 months or so. I would tell you that we have some unique talents in our business on the men’s side compared to others with what typically happens in the managed business is we consolidate your go-through cycle where you consolidate your volume to the top group of brands, it’s still relatively small for us. And then you go through a process, where small brands were over a period of time are going to own a much larger piece of your business. And that’s what we are seeing happen now in our men’s business from my perspective having the advantage of 20 years of watching this is that we are going to see our top 10 brands probably lose share over the next few years to a group of smaller emerging brands. And I have to tell you that’s a exciting place for us. We have some pain as we would cycle through these processes, but that’s a pretty exciting place for us to be, because we have always been about those next year brands, those next emerging brands. And working with our great, we have many – just to be clear we have many great brand partners and not even launching our business. So we are going to maximize results too there as best we can, but these are normal cycles we go through in the business. And I think that reflects on kind of at this point in time kind of one of the challenge that we have in our men’s businesses is what I think over the next few years will be this disaggregation to smaller brands and smaller brands becoming less concentrated in the top brands and smaller brands owning a bigger portion of the business over the next few years. Chris, do you have anything to add?

No, I think that’s absolutely right. As we think about our men’s business, it gets back to the category of performance that Rick talked about overall even with footwear, right, is this business is built on as grants go up and down their growth curves. Over time, we anniversary trends at other categories step up and fill in. And so I think that’s part of the strength of our model and you are seeing that today in the way that our women’s and our skates business has picked up for some of the other categories.

Alright. And your next question comes from the line of Andrew Burns from D.A. Davidson. Please proceed.

Thanks. Good afternoon. Just a follow-up from Richard’s question earlier about store potential, so you will end ‘14 with just over 550 U.S. stores and conceivably could be at the low end of your long-term target by the end of ‘15. So my question is when does the availability of locations, do you actually want to be in desirable locations start to be a limiting factor, that would be determining of where you end up within that 100 store range? Thanks.

We have identified all the locations we want to be in, Andrew. So it’s we are not going outside of our targeted group of locations. And so we are working as with our landlords on all of those locations at once, right to get the best locations within the remaining opportunities we have out there. So take us another three, four years to complete the cycle. As Chris said, we are going to continue to reposition locations. Some of that is going to continue to take place in the market. And so it’s not question really of availability. I mean, we know where we are going to put stores. I mean, it’s a – the target is there. The opportunity will be to continue to reevaluate that. As we have said on an annual basis to make sure that we feel good about the target. At this point, we still do. So that is just working to get the best locations within those targeted locations that are in our market.

Great, thanks. In the past, you have been very good at taking a conservative inventory approach. Just wondering given the rough start of the year for the retail environment, I would assume you are trying to plan on a store level, pretty flattish from an inventory perspective, but I also heard, I found it interesting that the comment about a little risk on the footwear side, are you looking to perhaps be a little more aggressive in pockets to try to find that next hit product or brand? Thanks.

No, I wouldn’t characterize that at all and thank you for first recognizing the fact that our teams are pretty good and have a good track record for managing inventory levels and we are good at it, where again I guess back to the very detailed level that we are sorting stores and planning stores and how we can roll that up in our world. So we talk about taking more risk it is very targeted. And it is not outside the budget that we would allow any one department or category business. So we were planning the trends where we are adjusting that, but in aggregate we are going to stay within the max limits that we allow for ourselves on our budgets, some things will go up, some things will go down, but so think of it as more micro-targeting to find that next item that would provide differentiation in the marketplace for us.

Great, thanks and good luck.

Thank you.

Alright. And your next question comes from the line of Morry Brown with Wedbush. Please proceed.

Hi, thank you for taking my question. I just wanted to follow up on the weather impact, would you guys quantify at all that you did the underperformance in the weather impacted regions or the outperformance in some of the warm weather regions?

No. I mean, there is really nothing to comment on. I think as you think about Q4 alone, the snow business was challenged in the quarter. And it wasn’t just challenged because of the weather conditions here in North America. Europe also is in the location that we are in, a pretty warm winter. So this is really the third winter in a row that we have seen that snow business be more challenged, but there really we would not comment on the overall impact. It’s not overly significant, but it’s worthwhile to call out as you look at the regions of performance that specifically those areas hardest hit by the storms impacting our results. And January was probably the biggest representation of that.

It’s we had to kind of I would tell you that the worst of all weather combination in a sense where it was really, really miserable as we said I think in for prolonged periods of time and stretches in the Midwest in the New England states, the East Coast, but then where it’s warmer the West Coast had been no snow. So we had a tough snow year on the West Coast, because we generally were up to the last few weeks. So in the Northwest we have been already having snow in the mountains in January. Now we have gotten dumped here in February and a bit here in March, but so it’s kind of in that sense you would say well those warm weather region like in California we will do better, well we do better, but that’s somewhat by the negative snow work business we had in the marketplaces. So it’s all about the complicated balance of mix of categories and departments that makeup our business, which again is Chris mentioned, was actually I think one of our strengths, because we are so diversified in the types of things we are doing. This was the year where we kind of – I will tell you the weather affected us negatively in both cases, whether it was warmer in the West that actually hurts our snow business. And then the snow business in the East is not as big whether it’s incredibly cold and challenge from that perspective.

It’s very helpful. Thank you.

Alright, you r next question comes from the line of Jennifer Black with Jennifer Black & Associates. Please proceed. Carla White - Jennifer Black & Associates: Hi, thank you for taking my question and this is Carla in for Jennifer. You commented earlier about Blue Tomato and that it’s not that they weren’t potentially mean to earn-out back to extreme low, can you extend on that is it due to weather, challenging economic environment or other constraints and how you feel about that business going forward? Thank you.

Thanks Carla and tell Jennifer hello for us alright. Carla White - Jennifer Black & Associates: Thank you.

So in the case of Blue Tomato I will start and let Chris follow-up with this if I miss anything here. I mean this was a business at the time of the acquisition that we absolutely killing. So the – I think it’s a very profitable business and very successful business and so the earn-out targets that you might guess were very aggressive. And as we said in our comments that we comp that in Q4 and we comp that for the year in Blue Tomato. So it’s just a question that like in the U.S. I think we have just seen a major change in the general consumer environment driven by macro reasons, driven by fundamental changes in consumer behavior and they are just not getting those targets that were set, which were very aggressive targets. And so trust me we would love them to be there and it will be great and this is also the reason you do earn-outs, right. And that’s the risk sharing aspect of – that you put in the place when you look at acquiring a business.

I just add to that as we think through this, just thinking back to what we said at the time of acquisition about what a great cultural match that Blue Tomato is and I would just continue that go that I mean this is a group that is hungry and working hard to go after it. And we’re – we still are incredibly encouraged by the partnering that we have there and we think we absolutely have the right partner in growing out our business in Europe. And what they’ve done in Austria and Germany right now quadrupling the store count in 18 months. It’s really significant and the efforts that they’ve put in. And so we’re very encouraged by the business and obviously as Rick pointed out is comping positively. So yes we take care in our down but we’re still optimistic about our future there.

Yes. This is still the second largest access sports market in the world. As we said in our comments it’s a highly fragmented market. And as Chris just said I mean he is absolutely right. (indiscernible) has been here over the last few days, these are great people who know what they’re doing, incredibly driven, very much a call from us is what we’re doing and we do – we’re retaining as we said this is a long-term play and we’re very optimistic from that perspective that this is going to be a great business over the long-term. Carla White - Jennifer Black & Associates: Thank you very much.

Thanks, Carla.

Ladies and gentlemen this will conclude the question-and-answer portion of today’s call. I’ll now turn the call back over to Rick for closing remarks.

Thank you. And again just as I’d like to do here as we wrap up another year. I just want to make I’d say thanks to the entire Zumiez team, our partners and vendors that we work with; we greatly appreciate all your support of what we do here at Zumiez. And even in these tough times of economic royalty we’re energized and really driven by what we think is just great opportunity actually in these challenging times. So again I appreciate everyone’s hard work. The team is working incredibly hard and we’re looking forward to having a successful 2014 and we look forward to talk with all of you in our first quarter conference call. Thanks everybody.

Ladies and gentlemen that concludes today’s conference. Thank you all for your participation. You may now disconnect. Have a wonderful day.