Zumiez Inc. Annual Report 2012

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FY2012 Annual Report · Zumiez Inc.

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Notice of 2013 Annual Meeting
And Proxy Statement
2012 Annual Report on Form 10-K

4001 204th Street SW
Lynnwood, Washington 98036

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

To Be Held On May 22, 2013

Dear Shareholder:

You are cordially invited to attend the 2013 annual meeting of shareholders of Zumiez Inc., a Washington

corporation. Zumiez is also referred to as “we,” “our,” “us” and the “Company.” The meeting will be held on
Wednesday, May 22, 2013 at 1:00 p.m. (Pacific Time) at our headquarters located at 4001 204th Street SW,
Lynnwood, Washington 98036 for the following purposes:

To elect two directors to hold office until our 2016 annual meeting of shareholders;

To consider and act upon a proposal to ratify the selection of Moss Adams LLP as our independent
registered public accounting firm for the fiscal year ending February 1, 2014 (“fiscal 2013”); and

To conduct any other business properly brought before the meeting.

These items of business are more fully described in the Proxy Statement accompanying this Notice.

Our board of directors recommends a vote “For” Items 1 and 2. The record date for the annual meeting is

March 18, 2013. Only shareholders of record at the close of business on that date may vote at the meeting or any
adjournment or postponement thereof.

Under the Securities and Exchange Commission (“SEC”) rules that allow companies to furnish proxy
materials to shareholders over the Internet, we have elected to deliver our proxy materials to the majority of our
shareholders over the Internet. The delivery process will allow us to provide shareholders with the information
they need, while at the same time conserving natural resources and lowering the cost of delivery. On or about
April 11, 2013, we mailed to our shareholders a Notice of Internet Availability of Proxy Materials (the “Notice”)
containing instructions on how to access our fiscal year ending February 2, 2013 (“fiscal 2012”) Proxy Statement
and 2012 Annual Report to Shareholders. The Notice also provides instructions on how to vote online or by
telephone and includes instructions on how to receive a paper copy of the proxy materials by mail.

YOUR VOTE IS IMPORTANT!

Whether or not you attend the annual meeting, it is important that your shares be represented and voted at
the meeting. Therefore, we urge you to promptly vote online, by telephone, or if you received a paper copy of the
voting card, submit your proxy by signing, dating and returning the accompanying proxy card in the enclosed
prepaid return envelope. If you decide to attend the annual meeting and you are a shareholder of record, you will
be able to vote in person even if you have previously submitted your proxy.

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON MAY 22, 2013: The Notice of Annual Meeting
of Shareholders, Proxy Statement and the Annual Report to Shareholders are available on the internet at
http://ir.zumiez.com./phoenix.zhtml?c=188692&p=irol-reports.

By Order of the Board of Directors
Chris K. Visser
General Counsel and Corporate Secretary

Lynnwood, Washington
April 11, 2013

4001 204th Street SW
Lynnwood, Washington 98036

PROXY STATEMENT
FOR THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 22, 2013

QUESTIONS AND ANSWERS

Why am I receiving these proxy materials?

We are making available to you this proxy statement and the accompanying proxy card because the board of
directors of Zumiez Inc. (“Zumiez,” “we,” “us” and the “Company”) is soliciting your proxy to vote at our 2013
annual meeting of shareholders. You are invited to attend the annual meeting to vote on the proposals described
in this proxy statement. Should you choose to attend, you must be ready to present proof of your ownership of
Zumiez stock as of the record date, March 18, 2013, to attend the meeting. However, you do not need to attend
the meeting to vote your shares. Instead, you may simply complete, sign and return the accompanying proxy
card. For more information on voting, see information below under the section heading “How do I vote?”

We intend to mail or otherwise make available this proxy statement and the accompanying proxy card on or

about April 11, 2013 to all shareholders of record entitled to vote at the annual meeting.

Who can vote at the annual meeting?

Only shareholders of record at the close of business on March 18, 2013, the record date for the annual

meeting, will be entitled to vote at the annual meeting. At the close of business on the record date, there were
30,145,654 shares of common stock outstanding and entitled to vote.

Shareholder of Record: Shares Registered in Your Name

If, at the close of business on the record date, your shares were registered directly in your name with our

transfer agent, American Stock Transfer & Trust Company, then you are a shareholder of record. As a
shareholder of record, you may vote in person at the meeting or vote by proxy. Whether or not you plan to attend
the meeting, we urge you vote your proxy to ensure your vote is counted.

Beneficial Owner: Shares Registered in the Name of a Broker, Bank or Other Agent

If, at the close of business on the record date, your shares were not held in your name, but rather in an
account at a brokerage firm, bank or other agent, then you are the beneficial owner of shares held in “street
name” and these proxy materials are being forwarded to you by your broker, bank or other agent. The broker,
bank or other agent holding your account is considered to be the shareholder of record for purposes of voting at
the annual meeting. As a beneficial owner, you have the right to direct your broker, bank or other agent on how
to vote the shares in your account. You are also invited to attend the annual meeting. Should you choose to
attend, you must be ready to present proof of your ownership of Zumiez stock as of the record date, March 18,
2013, in order to attend the meeting. However, since you are not the shareholder of record, you may not vote
your shares in person at the meeting unless you request and obtain a valid legal proxy issued in your name from
your broker, bank or other agent. For more information about a legal proxy, see the information, below, under the
section heading “How do I vote?—Beneficial Owner: Shares Registered in the Name of Broker, Bank or Other
Agent.”

What am I voting on?

You are being asked to vote on the following matters:

• Election of two directors (Proposal 1); and

• To consider and act upon a proposal to ratify the selection of Moss Adams LLP as our independent

registered public accounting firm for the fiscal year ending February 1, 2014 (“fiscal 2013”) (Proposal 2).

When you vote your proxy, you appoint Chris K. Visser and Richard M. Brooks as your representatives at
the meeting. When we refer to the “named proxies,” we are referring to Mr. Visser and Mr. Brooks. This way,
your shares will be voted even if you cannot attend the meeting.

How do I vote?

For Proposals 1 and 2, you may vote “For,” “Against” or “Abstain” from voting (for the election of
directors, you may do this for any director nominee that you specify). The procedures for voting are as follows:

Shareholder of Record: Shares Registered in Your Name

If you are a shareholder of record, you may vote in person at the annual meeting, via the internet, by telephone
or by proxy card. Whether or not you plan to attend the meeting, we urge you to vote by proxy to ensure your vote
is counted. You may still attend the meeting and vote in person if you have already voted by proxy.

• To vote in person, come to the annual meeting and we will give you a ballot when you arrive. Please be

prepared to present proof of your ownership of Zumiez stock as of March 18, 2013.

• To vote via the internet—You may vote online at www.proxyvote.com. Voting on the internet has the
same effect as voting by mail or by telephone. If you vote via the internet, do not return your proxy
card and do not vote by telephone. Internet voting will be available until 11:59 p.m. Eastern time,
May 21, 2013.

• To vote by telephone—You may vote by telephone by calling 1-800-690-6903 and following the

automated voicemail instructions. Voting by telephone has the same effect as voting by mail or via the
internet. If you vote by telephone, do not return your proxy card and do not vote via the internet.
Telephone voting will be available until 11:59 p.m. Eastern time, May 21, 2013.

• To vote using the proxy card, simply complete, sign and date the proxy card and return it promptly in
the envelope provided. If you return your signed proxy card to us before the annual meeting, we will
vote your shares as you direct.

Beneficial Owner: Shares Registered in the Name of Broker, Bank or Other Agent

If you are a beneficial owner of shares registered in the name of your broker, bank or other agent, you
should have received a proxy or voting instruction form with these proxy materials from that organization rather
than from us. You can vote by using the proxy or voting information form provided by your broker, bank or other
agent or, if made available, vote by telephone or via the internet. To vote in person at the annual meeting, you
must obtain a legal proxy from your broker, bank or other agent. Under a legal proxy, the bank, broker, or other
agent confers all of its rights as a record holder (which may in turn have been passed on to it by the ultimate
record holder) to grant proxies or to vote at the meeting. Follow the instructions from your broker, bank or other
agent included with these proxy materials, or contact your broker, bank or other agent to request a legal proxy.
Please allow sufficient time to receive a legal proxy through the mail after your broker, bank or other agent
receives your request.

How many votes do I have?

On each matter to be voted upon, you have one vote for each share of Zumiez common stock you own as of

the close of business on March 18, 2013, the record date for the annual meeting.

What if I return a proxy card but do not make specific choices?

If you return a signed and dated proxy card without marking any voting selections, your shares will be voted

in the following manner:

•

“For” the election of all nominees for director (Proposal 1); and

“For” the ratification of the selection of Moss Adams LLP as our independent registered public
accounting firm for fiscal 2013 (Proposal 2).

If any other matter is properly presented at the meeting, one of the named proxies on your proxy card as

your proxy will vote your shares using his discretion.

Who is paying for this proxy solicitation?

We will pay for the entire cost of soliciting proxies. In addition to mailed proxy materials, our directors and

employees may also solicit proxies in person, by telephone or by other means of communication. Directors and
employees will not be paid any additional compensation for soliciting proxies. We may also reimburse brokerage
firms, banks and other agents for the cost of forwarding proxy materials to beneficial owners. We have retained
Advantage Proxy to act as a proxy solicitor in conjunction with the annual meeting. We have agreed to pay
Advantage Proxy approximately $5,500 for proxy solicitation services.

What does it mean if I receive more than one proxy card?

If you receive more than one proxy card, your shares are registered in more than one name and/or are
registered in different accounts. Please complete, sign and return each proxy card to ensure that all of your shares
are voted. Alternatively, if you vote by telephone or via the internet, you will need to vote once for each proxy
card and voting instruction card you receive.

Can I change my vote after voting my proxy?

Yes. You can revoke your proxy at any time before the applicable vote at the meeting. If you are the record

holder of your shares, you may revoke your proxy in any one of three ways:

• You may submit another properly completed proxy with a later date.

• You may send a written notice that you are revoking your proxy to our Corporate Secretary,

Chris K. Visser, at 4001 204th Street SW, Lynnwood, Washington 98036.

• You may attend the annual meeting and vote in person (if you hold your shares beneficially through a
broker, bank or other agent you must bring a legal proxy from the record holder in order to vote at the
meeting).

If your shares are held by your broker, bank or other agent, you should follow the instructions provided by

them.

What is the quorum requirement?

A quorum of shareholders is necessary to hold a valid meeting. A quorum will be present if at least a
majority of the outstanding shares as of the close of business on the record date are represented by shareholders
present at the meeting or by proxy.

Your shares will be counted towards the quorum only if you submit a valid proxy (or one is submitted on
your behalf by your broker, bank or other agent) or if you vote in person at the meeting. Generally, abstentions
and broker non-votes (discussed below in “How are votes counted?”) will be counted towards the quorum
requirement. If there is no quorum, a majority of the votes present at the meeting may adjourn the meeting to
another date. Your vote is extremely important, so please vote.

How are votes counted?

Votes will be counted by the inspector of election appointed for the meeting, who will separately count
“For,” “Against” and “Abstain” and broker non-votes (described below, if applicable) for Proposals 1 and 2.
Abstentions and broker non-votes will not be counted as votes cast for any proposal.

If your shares are held by your broker, bank or other agent as your nominee (that is, in “street name”), you

will need to obtain a voting instruction form from the institution that holds your shares and follow the
instructions included on that form regarding how to instruct your broker, bank or other agent to vote your shares.
If you do not give instructions to your broker, bank or other agent, they can vote your shares with respect to
discretionary items, but not with respect to non-discretionary items. Under the rules of the New York Stock
Exchange, the election of directors (Proposal 1) is considered a non-discretionary item while the ratification of
the selection of Moss Adams LLP as our auditor (Proposal 2) is considered a discretionary item. Accordingly, if
your broker holds your shares in its name, the broker is not permitted to vote your shares on Proposal 1 but is
permitted to vote your shares on Proposal 2 even if it does not receive voting instructions from you because
Proposal 2 is considered discretionary. When a broker votes a client’s shares on some but not all of the proposals
at the annual meeting, the missing votes are referred to as broker non-votes. Broker non-votes will be included in
determining the presence of a quorum at the annual meeting but are not considered present or a vote cast for
purposes of voting on the non-discretionary items. Please vote your proxy so your vote can be counted.

How many votes are needed to approve each proposal?

Under Washington corporation law, our Articles of Incorporation and our bylaws, if a quorum exists, the
approval of any corporate action taken at a shareholder meeting is based on votes cast. “Votes cast” means votes
actually cast “For” or “Against” Proposals 1 and 2, whether by proxy or in person. Abstentions and broker non-
votes (discussed previously) are not considered “votes cast.” Each outstanding share entitled to vote with respect
to the subject matter of an issue submitted to a meeting of the shareholders shall be entitled to one vote per share.

Proposal 1. As described in more detail below under “Election of Directors,” we have adopted majority
voting procedures for the election of directors in uncontested elections. As this is an uncontested election, the
director nominees will be elected if the votes cast “For” a nominee’s election exceed the votes cast “Against” the
director nominee. There is no cumulative voting for the election of directors.

If a director nominee does not receive the requisite votes to be elected, that director’s term will end on the
date on which an individual is selected by the board of directors to fill the position held by such director or ninety
(90) days after the date the election results are determined, or the date the director nominee resigns, whichever
occurs first.

Proposal 2. For the ratification of the selection of our independent registered public accounting firm for
fiscal 2013, if the number of “For” votes exceeds the number of “Against” votes, then Proposal 2 will be ratified.

If you abstain from voting on any of the proposals, or if a broker or bank indicates it does not have
discretionary authority to vote on any particular proposal, the shares will be counted for the purpose of
determining if a quorum is present, but will not be included in the vote totals as a vote cast with respect to the
proposal in question. Furthermore, any abstention or broker non-vote (a broker non-vote is explained previously
in “How are votes counted”) will have no effect on the proposals to be considered at the meeting since these
actions do not represent votes cast by shareholders.

How can I find out the results of the voting at the annual meeting?

Preliminary voting results will be announced at the annual meeting. Final voting results will be published on

Form 8-K with the Securities and Exchange Commission (“SEC”) within four business days after the annual
meeting.

Director Qualifications

The board of directors believes that it is necessary for each of the Company’s directors to possess many
qualities and skills and the composition of our board of directors has been designed to allow for expertise in
differing skill sets. The governance and nominating committee is responsible for assisting the board in matters of
board organization and composition and in establishing criteria for board membership. A detailed discussion of
these criteria and how they are utilized is set forth below under “Membership Criteria for Board Members.” Also,
the procedures for nominating directors are set forth below under “Director Nomination Procedures.”

Information as of the date of this proxy statement about each nominee for election this year and each other

current director is included below under “Election of Directors.” The information presented includes information
each director has given us about his or her age, all positions he or she holds, his or her principal occupation and
business experience for the past five years and the names of other publicly-held companies of which he or she
currently serves as a director or has served as a director during the past five years. In addition, information is also
presented below regarding each nominee’s and current director’s specific experience, qualifications, attributes
and skills that led our board to the conclusion that he or she should serve as a director. We also believe that all of
our director nominees and current directors have a reputation for integrity, honesty and adherence to high ethical
standards.

Information about the number of shares of common stock beneficially owned by each director appears under

the heading “Security Ownership of Certain Beneficial Owners and Management.” There are no family
relationships among any of the directors and executive officers of the Company.

Board Leadership

We separate the roles of Chief Executive Officer (“CEO”) and Chairman of the Board (“Chairman”) in
recognition of the differences between the two roles. Our CEO, Richard M. Brooks, is responsible for setting the
strategic direction for the Company and the day to day leadership and performance of the Company, while our
Chairman, Thomas D. Campion, provides guidance to the CEO and sets the agenda for board meetings and
presides over meetings of the full board of directors. Because Mr. Campion is an employee of the Company and
is therefore not “independent,” our board has appointed the chairman of our governance and nominating
committee, Matthew L. Hyde, as the Company’s lead independent director. The lead independent director has
responsibility to:

•

call, lead and preside over meetings of the independent directors, which meet in private executive
sessions at each board meeting;

call special meetings of the board of directors on an as-needed basis;

set the agenda for executive sessions of meetings of the independent directors;

facilitate discussions among the independent directors on key risks and issues and concerns outside of
board meetings;

brief the Chairman and CEO on issues that arise in executive session meetings;

serve as a non-exclusive conduit to the Chairman and CEO of views, concerns and issues of the
independent directors; and

collaborate with the Chairman and CEO on setting the agenda for board meetings.

Membership Criteria for Board Members

The governance and nominating committee of the board is responsible for establishing criteria for board
membership. This criteria includes, but is not limited to, personal and professional ethics, training, commitment
to fulfill the duties of the board of directors, commitment to understanding the Company’s business, commitment

to engage in activities in the best interest of the Company, independence, industry knowledge and contacts,
financial and accounting expertise, leadership qualities, public company board of director and committee
experience and other relevant experience and qualifications. These criteria are referenced in the Company’s
Corporate Governance Guidelines and in Exhibit A to the governance and nominating committee’s charter, both
available at http://ir.zumiez.com under the “Governance” section. The board also has the ability to review and
add other criteria, from time to time, that it deems relevant. Specific weights are not assigned to particular criteria
and no particular criterion is necessarily applicable to all prospective nominees.

The criteria referenced above are used as guidelines to help evaluate the experience, qualifications, skills

and diversity of current and potential board members. With respect to diversity, we broadly construe it to mean
diversity of race, gender, age, geographic orientation and ethnicity, as well as diversity of opinions, perspectives,
and professional and personal experiences. Nominees are not discriminated against on the basis of race, religion,
national origin, sexual orientation, disability or any other basis proscribed by law. The board believes that the
backgrounds and qualifications of the directors, considered as a group, should provide a significant composite
mix of experience, knowledge and abilities that will allow the board to fulfill its responsibilities.

Risk Oversight

The board takes an active role, as a whole and also at the committee level, in helping the Company evaluate

and plan for the material risks it faces, including operational, financial, legal and regulatory and strategic and
reputational risks. As part of its charter, the audit committee discusses with management the Company’s major
financial risk exposures and the steps management has taken to monitor and control such exposures, including
the Company’s risk assessment and risk management policies. The compensation committee is responsible for
overseeing the management of risks relating to the Company’s executive compensation plans and arrangements.
The governance and nominating committee manages risks associated with corporate governance, including risks
associated with the independence of the board and reviews risks associated with potential conflicts of interest
affecting directors and executive officers of the Company. While each committee is responsible for evaluating
certain risks and overseeing the management of such risks, the entire board is regularly informed through
committee reports about such risks. Furthermore, at least annually, the board conducts an independent session
where they outline the risks that they believe exist for the Company and the broader retail industry and compares
these with the risks outlined by management. Subsequent to this evaluation, management prioritizes the
identified risks along with strategies to manage them or address how the Company intends to mitigate these risks.
Additionally, the board exercises its risk oversight function in approving the annual budget and quarterly re-
forecasts and in reviewing the Company’s long-range strategic and financial plans with management. The
board’s role in risk oversight has not had any effect on the board’s leadership structure.

Director Compensation

The goal of our director compensation is to help attract, retain and reward our non-employee directors and
align their interests with those of the shareholders. The board follows the compensation philosophies discussed,
below, in the Compensation Discussion & Analysis. Our desired goal for total director compensation (cash and
equity) is to be at the 50th percentile of comparable companies based on our compensation consultant’s
competitive survey results.

The Company pays its non-employee directors an annual fee for their services as members of the board of

directors. Each non-employee director receives an annual cash retainer of $36,000. The audit committee
members receive cash compensation of $12,000 with the chairperson receiving $24,000 per year. The
compensation committee members receive cash compensation of $9,000 with the chairperson receiving $18,000
per year. The governance and nominating committee member receives cash compensation of $6,000 with the
chairperson receiving $18,000 per year. Directors appointed in an interim period receive pro-rata retainer fees
based on the number of meetings they attend between annual shareholder meetings. The committee chairperson
and the respective committee members are paid rates commensurate with the duties and responsibilities inherent
within the position held.

Additionally, the Company issues restricted stock awards to its non-employee directors. The board believes

such awards provide alignment with the interests of our shareholders. Directors appointed in an interim period
receive pro-rata restricted stock awards based on the number of meetings they attend between annual shareholder
meetings.

The Company reimburses all directors for reasonable expenses incurred to attend meetings of the board of

directors. Non-employee directors may elect to have a portion, or all, of their annual retainer be used for the
reimbursement of travel expenses in excess of those that the Company considers to be reasonable.

The following table discloses the cash and stock awards earned by each of the Company’s non-employee

directors during the fiscal year ending February 2, 2013 (“fiscal 2012”).

Name

William M. Barnum Jr. (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Matthew L. Hyde . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ernest R. Johnson . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sarah (Sally) G. McCoy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gerald F. Ryles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Travis D. Smith (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
James M. Weber . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Fees Earned
or Paid in
Cash ($)

45,000
54,000
60,000
54,000
66,000
48,000
51,000

Stock
Awards
(1) ($)

76,810
76,810
76,810
76,810
76,810
76,828
76,810

Total ($)

121,810
130,810
136,810
130,810
142,810
124,828
127,810

(1) This column represents the aggregate grant-date fair value of restricted stock awards calculated in

On May 23, 2012, the day of the annual shareholder meeting, the Company awarded 2,211 shares of
restricted stock to each of the directors with a grant-date fair value of $76,810, except for Mr. Smith. Upon
his appointment to the board of directors, Mr. Smith was awarded 2,255 shares of restricted stock with a
grant date of August 14, 2012 and a grant-date fair value of $76,828. The stock awards for all directors will
vest on May 23, 2013.

(2) Mr. Barnum will be retiring when his current term expires with the Annual Meeting in May 2013.

(3) Mr. Smith was appointed to the board of directors on August 14, 2012.

PROPOSAL 1

ELECTION OF DIRECTORS

The Company currently has nine director positions and will have eight director positions after the Annual
Meeting in May 2013. The directors are divided into three classes so that approximately one-third of the directors
are elected each year for three-year terms. Directors are elected to hold office until their successors are elected
and qualified, or until resignation or removal in the manner provided in our bylaws. Two directors are nominees
for election this year and each has consented to serve a three-year term ending in 2016. The remaining directors
will continue to serve the terms set out below, with the exception of Mr. Barnum, who will be retiring when his
current term expires with the Annual Meeting in May 2013.

The nominees for director in an uncontested election, such as this one, will be elected if the votes cast in
favor of a nominee’s election exceed the votes cast opposing such nominee’s election. Abstentions and broker
non-votes are not considered “votes cast.” Likewise, a share otherwise present at the meeting as to which a
shareholder gives no authority or direction to vote is also not considered a “vote cast.”

In a contested election, the directors shall be elected by a plurality of the votes cast. A “contested election”
means an election of directors of the Corporation in which the number of nominees for any election of directors
nominated by (i) the board of directors, or (ii) any shareholder pursuant to Article 1, Section 10 of the
Company’s bylaws, or (iii) a combination of nominees by the board of directors and any shareholder pursuant to
Article I, Section 10 of the Company’s bylaws, exceed the number of directors to be elected.

A nominee for director in an uncontested election who does not receive the requisite votes for election, but
who was a director at the time of the election, shall continue to serve as a director for a term that shall terminate
on the date that is the earlier of: (i) ninety (90) days from the date on which the voting results of the election are
certified, (ii) the date on which an individual is selected by the board of directors to fill the office held by such
director, which selection shall be deemed to constitute the filling of a vacancy by the board of directors, or
(iii) the date the director resigns. Except in the foregoing sentence, a director who failed to receive a majority
vote for election will not participate in the filling of his or her office. If none of the directors receive a majority
vote in an uncontested election, then the incumbent directors (a) will nominate a slate of directors and hold a
special meeting for the purpose of electing those nominees as soon as practicable, and (b) may in the interim fill
one or more offices with the same director(s) who will continue in office until their successors are elected. If, for
any reason, the directors shall not have been elected at any annual meeting, they may be elected at a special
meeting of shareholders called for that purpose in the manner provided by the Company’s bylaws.

We invite and recommend all of our directors and the nominees for director to attend our annual meeting of

shareholders.

Nominees for Election to Terms Expiring in 2016

Gerald F. Ryles, 76, has served on our board of directors since August 2005. Until it was acquired in
September 2003, Mr. Ryles was Chairman of the Board and a major shareholder of Microserv Technology
Services, a privately held information technology services company. From January 1994 through January 2001,
Mr. Ryles was also the Chief Executive Officer. He also has over 40 years of management experience in several
different industries as well as management consulting experience with McKinsey & Company. He is a graduate
of the University of Washington, and earned an M.B.A. from Harvard University. He also serves on the board of
directors of Giant Campus an educational software company, and the State of Washington’s Board of
Accountancy, where he was re-appointed by the Governor in July of 2012 to serve for another three year term.

Director Qualifications: Mr. Ryles’ extensive prior business experiences as a chief executive officer and his

financial expertise are critical to our board and the audit committee in particular. Mr. Ryles’ consulting
background and chief executive experience provides the Company with perspective regarding a number of
different successful business strategies that help the Company formulate its operating and growth plans.

Travis D. Smith, 40, was the appointed to our board of directors in August 2012 and is the CEO and
President of Jo-Ann Fabric and Craft stores. Mr. Smith began his career with Jo-Ann in 2006 serving as the
Executive Vice President, Merchandising and Marketing. In February 2009, Mr. Smith was named Chief
Operating Officer and added the duties of President in February 2010, then Chief Executive Officer in August
2011. Prior to his employment with Jo-Ann, Mr. Smith held merchandising and marketing positions of increasing
responsibility with Fred Meyer Stores, a division of the Kroger Company, ultimately serving as Senior Vice
President, General Merchandise. Mr. Smith is a graduate of the University of Notre Dame with a Bachelor’s
Degree in Business Marketing and Communications.

Director Qualifications: Mr. Smith’s background in retailing and in particular merchandising, marketing
and leadership roles adds important and relevant experience to the Company’s board of directors. Mr. Smith also
brings experience in brand building, retail brick and mortar and direct to customer operations.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF EACH NOMINEE
PREVIOUSLY NAMED

Continuing Directors Whose Terms Expire in 2014

Thomas D. Campion, 64, is one of our co-founders and has served on our board of directors since our
inception in 1978. Mr. Campion has held various senior management positions during this time, including
serving as our Chairman since June 2000. From November 1970 until August 1978, he held various management
positions with JC Penney Company. Mr. Campion holds a B.A. in Political Science from Seattle University.
Mr. Campion serves on the Board of the Alaska Wilderness League, a Washington, D.C. based environmental
group, and is on the board of Conservation Northwest, a Bellingham, Washington based environmental group. He
is also the trustee of the Campion Foundation, a nonprofit organization focused on ensuring that biologically
important ecosystems in Northwestern North American are preserved. The Foundation also works on
homelessness issues in the Pacific Northwest.

Director Qualifications: Mr. Campion’s knowledge as a retailer and as the co-founder of the Company
provide the board with invaluable insight into the Company’s business and its unique culture. Mr. Campion
provides generational leadership, sales, marketing, merchandising and brand building experience and expertise.
Mr. Campion’s particular knowledge and experience with Zumiez and its competition helps the Company
formulate short and long-term strategies that have contributed to Zumiez differentiating itself in the specialty
niche of action sports retailing. As the Company’s largest shareholder, Mr. Campion’s interests are aligned with
other Zumiez shareholders’ interests to increase the long-term value of the Company.

Sarah (Sally) G. McCoy, 52, was appointed to our board of directors in October 2010 and is the CEO and
President of CamelBak Products, a company that originated hands free-hydration and is the leader in hydration
products. Ms. McCoy has been the CEO and President of CamelBak since September of 2006. Prior to joining
CamelBak, Ms. McCoy co-founded Silver Steep Partners in 2004, a leading investment banking firm catering to
companies in the outdoor and active lifestyle industry. Before Silver Steep, McCoy served as president of Sierra
Designs and Ultimate Direction and as vice president at The North Face. Ms. McCoy is a graduate of Dartmouth
College. She also serves as a Director of the Conservation Alliance.

Director Qualifications: Ms. McCoy’s background in sales, merchandising, sourcing, marketing and
executive management of outdoor and action sports consumer brands provides strategic insight and direction for
Zumiez as we plan our branded and private label growth strategies. Additionally, her experience in investment
banking and valuation experience in our industry is valuable as we formulate our growth strategies.

Ernest R. Johnson, 62, was appointed to our board of directors in July 2011 and has served as the Chairman
of Cutter & Buck Inc. and President and Chief Executive Officer for New Wave USA Inc. since November 2009.
From February 2006 to November 2009, he served as Chief Executive Officer of Cutter & Buck. Mr. Johnson

was also a Senior Vice President and Chief Financial Officer for Cutter & Buck from November 2002 to
February 2006. Prior to joining Cutter & Buck, he worked 29 years in several commercial banks holding various
senior accounting and financial positions. Mr. Johnson holds a BA in Business Administration—Accounting
from Washington State University.

Director Qualifications: Mr. Johnson’s background as a CEO for an apparel company and as a CFO for an
apparel company and commercial banks provides relevant leadership and financial expertise to the Company’s
board of directors. Mr. Johnson also has experience in international business and in mergers and acquisitions.

Continuing Directors Whose Terms Expire in 2015

Richard M. Brooks, 53, has served as our CEO since June 2000. From August 1993 through June 2000, he

served as a Vice President and our Chief Financial Officer. From November 1989 until February 1992,
Mr. Brooks was with Interchecks, Inc., a subsidiary of Bowater PLC, as a finance officer. Mr. Brooks was with
Deloitte, Haskins & Sells, currently known as Deloitte LLP, from July 1982 to March 1989. Mr. Brooks holds a
B.A. in Business from the University of Puget Sound. Mr. Brooks has served on the University of Puget Sound
Board of Trustees from May 2002 to the present and he currently chairs its Board of Trustees as well as its
Compensation and Executive Committees.

Director Qualifications: Mr. Brooks’ day to day leadership as our CEO provides him with detailed

knowledge of our business and operations. Mr. Brooks provides generational leadership, sales, marketing,
merchandising and brand building experience and expertise. Mr. Brooks has demonstrated a record of innovation,
achievement and leadership. This experience provides the board with a unique perspective into the operations
and vision of Zumiez. Mr. Brooks’ particular knowledge and experience with Zumiez and its competition helps
the Company formulate short and long-term strategies that have helped Zumiez differentiate itself in the specialty
niche of the action sports retail business. As one of the Company’s largest shareholders, Mr. Brooks’ interest is
aligned with other Zumiez shareholders’ interests to increase the long-term value of the Company.

Matthew L. Hyde, 50, was appointed to our board in December 2005 and is the Chief Executive Officer and

President at West Marine, Inc. where he joined in June 2012. Previously he served as an Executive Vice
President of Recreational Equipment Inc. (REI), where he had been since 1986, responsible for Marketing, Direct
Sales, Real Estate and Retail operations. Mr. Hyde previously led REI’s online division, championing its award-
winning multi-channel strategy. He currently serves on the board of the YMCA of the USA, and holds a
Bachelor’s of Science degree from Oregon State University in Corvallis.

Director Qualifications: Mr. Hyde’s background in a retail company, including his online retail and brand
marketing experience, is of critical importance to the board. Mr. Hyde also provides critical merchandising and
brand building expertise because of his long tenure in specialty retail. Mr. Hyde’s successful expertise in building
a retail brick and mortar, direct and multi-channel strategy provides insight and experience as the Company plans
its growth in these channels of distribution.

James M. Weber, 53, was appointed to our board in April 2006 and is the President and CEO of Brooks
Sports, a leading running shoe and apparel company, where he has been since 2001. Mr. Weber’s experience also
includes positions as Managing Director of U.S. Bancorp Piper Jaffray Seattle Investment Banking practice,
Chairman and CEO of Sims Sports, President of O’Brien International, Vice President of The Coleman Company
and various roles with the Pillsbury Company. Mr. Weber earned an M.B.A., with distinction, from the Tuck
School at Dartmouth College and is a graduate of the University of Minnesota.

Director Qualifications: Mr. Weber’s role as the chief executive officer of a sports related company and his

international business experience, extensive brand building, marketing and chief executive officer experience
provide our board with a very useful perspective as the Company plans its growth strategies.

Retiring Director

William M. Barnum, Jr., 59, has served on our board of directors since November 2002 and will retire when

his current term expires with the Annual Meeting in May 2013. Since 1984, Mr. Barnum has been with
Brentwood Private Equity where he co-founded the firm’s private equity effort, and is currently its General
Partner. Prior to joining Brentwood Private Equity, Mr. Barnum worked at Morgan Stanley & Co. in the
investment banking division. He is a graduate of Stanford University, and a graduate of Stanford Law School and
Stanford Graduate School of Business. Presently, Mr. Barnum is a director of Filson Holdings, Inc., Quiksilver
Corporation, The Teaching Company Holdings, Inc., Ariat International, Inc., ThreeSixty Asia Ltd and Zoe’s
Kitchen Inc.

Director Qualifications: Mr. Barnum’s background in private equity and his public company board
experience is invaluable to our board’s discussions of financial and capital market matters. As the Company
formulates and executes its growth strategies, Mr. Barnum provides valuable insights and experiences regarding
mergers and acquisitions and international expansion. Additionally, Mr. Barnum has been engaged in the retail
and action sports industry for many years and his experience provides valuable guidance to the Company.

CORPORATE GOVERNANCE

Independence of the Board of Directors and its Committees

As required under Nasdaq listing rules, a majority of the members of a listed company’s board of directors

must qualify as “independent,” as affirmatively determined by the board of directors. Our board of directors
consults with our counsel to ensure that the board’s determinations are consistent with all relevant securities and
other laws and regulations regarding the definition of “independent,” including those set forth in applicable
Nasdaq listing rules, as in effect from time to time.

Consistent with these considerations, after review of all relevant transactions or relationships between each

director or any of his or her family members and the Company, our senior management and our independent
auditors, our board of directors has affirmatively determined that all of our directors are independent directors
within the meaning of the applicable Nasdaq listing rules, except for our Chairman, Mr. Campion, and CEO,
Mr. Brooks.

As required under applicable Nasdaq listing rules, our independent directors meet in regularly scheduled

executive sessions at which only independent directors are present. All of the committees of our board of
directors are comprised of directors determined by the board to be independent within the meaning of the
applicable Nasdaq listing rules.

Certain Relationships and Related Transactions

The Company made charitable contributions to the Zumiez Foundation of $0.7 million in both fiscal 2012
and the fiscal year ending January 28, 2012 (“fiscal 2011”). Our Chairman, Thomas D. Campion, is a trustee of
the Zumiez Foundation.

Policy and Procedures with Respect to Related Person Transactions

The Company recognizes that Related Person Transactions (defined as transactions, arrangements or
relationships in which the Company was, is or will be a participant and the amount involved exceeds $10,000,
and in which any Related Person (defined below) had, has or will have a direct or indirect interest) may raise
questions among shareholders as to whether those transactions are consistent with the best interests of the
Company and its shareholders. It is the Company’s written policy to enter into or ratify Related Person
Transactions only when the board of directors, acting through the audit committee of the board of directors,
determines that the Related Person Transaction in question is in, or is not inconsistent with, the best interests of
the Company and its shareholders, including but not limited to situations where the Company may obtain
products or services of a nature, quantity or quality, or on other terms, that are not readily available from
alternative sources or when the Company provides products or services to Related Persons on an arm’s length
basis on terms comparable to those provided to unrelated third parties or on terms comparable to those provided
to employees generally. A summary of the Company’s policies and procedures with respect to review and
approval of Related Person Transactions are set forth below.

“Related Persons” are defined as follows:

any person who is, or at any time since the beginning of the Company’s last fiscal year was, a director
or executive officer of the Company or a nominee to become a director of the Company;

any person who is known to be the beneficial owner of more than 5% of any class of the Company’s
voting securities;

any immediate family member of any of the foregoing persons, which means any child, stepchild,
parent, stepparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-
in-law, or sister-in-law of the director, executive officer, nominee or more than 5% beneficial owner,
and any person (other than a tenant or employee) sharing the household of such director, executive
officer, nominee or more than 5% beneficial owner; and

any firm, corporation or other entity in which any of the foregoing persons is employed or is a general
partner or principal or in a similar position or in which such person has a 5% or greater beneficial
ownership interest.

Directors and executive officers are required to submit to the audit committee a list of immediate family

members and a description of any current or proposed Related Person Transactions on an annual basis and
provide updates during the year.

In its review of any Related Person Transactions, the audit committee shall consider all of the relevant facts
and circumstances available to the audit committee, including (if applicable) but not limited to: the benefits to the
Company; the impact on a director’s independence in the event the Related Person is a director, an immediate
family member of a director or an entity in which a director is a partner, shareholder or executive officer; the
availability of other sources for comparable products or services; the terms of the transaction; and the terms
available to unrelated third parties or to employees generally. No member of the audit committee shall participate
in any review, consideration or approval of any Related Person Transaction with respect to which such member
or any of his or her immediate family members is the Related Person. The audit committee shall approve or ratify
only those Related Person Transactions that are in, or are not inconsistent with, the best interests of the Company
and its shareholders as the audit committee determines in good faith. The audit committee shall convey the
decision to the CEO, General Counsel or the Chief Financial Officer, who shall convey the decision to the
appropriate persons within the Company.

Information Regarding the Board of Directors and its Committees

Our board has established an audit committee, compensation committee and governance and nominating

committee. The board has adopted a written charter for each committee. The charters of these three committees
are posted on the Company’s website and can be accessed free of charge at http://ir.zumiez.com and are available
in print to any shareholder who requests them. The composition of our board committees complies with the
applicable rules of the SEC and Nasdaq. The board has determined that Ernest R. Johnson is an audit committee
financial expert as defined in the rules of the SEC.

Lead Independent

Director
Governance & Nominating
Committee

Audit Committee

Financial Expert

Compensation Committee

Chairperson

Member

Audit Committee

William M. Barnum . . . . . .

Matthew L. Hyde

. . . . . .

Ernest R. Johnson

. . . . . .

Sarah (Sally) G. McCoy . . .

Gerald F. Ryles . . . . . . . . . .

Travis D. Smith . . . . . . . . .

James M. Weber . . . . . . . . .

(*) Designates director who will be retiring with the Annual Meeting in May 2013

Audit Committee

As more fully described in its charter, our audit committee has responsibility for, among other things:

•

the sole authority to appoint, determine the funding for and oversee the independent registered public
accounting firm;

assisting our board in monitoring the integrity of our financial statements and other SEC filings;

•

discussing with our management and our independent registered public accounting firm significant
financial reporting issues and judgments and any major issues as to the adequacy of our internal
controls;

reviewing our annual and quarterly financial statements prior to their filing with the SEC and prior to
the release of our results of operations;

reviewing the independence, performance and qualifications of our independent registered public
accounting firm and presenting its conclusions to our board and approving, subject to permitted
exceptions, any non-audit services proposed to be performed by the independent registered public
accounting firm;

oversight of the performance of the Company’s internal audit function; and

reviewing its charter at least annually for appropriate revisions.

The audit committee has the power to investigate any matter brought to its attention within the scope of its

duties and to retain counsel for this purpose where appropriate.

Governance and Nominating Committee

As more fully described in its charter, our governance and nominating committee has the responsibility for,

among other things:

•

recommending persons to be selected by the board as nominees for election as directors and as chief
executive officer;

assessing our directors’ and our board’s performance;

• making recommendations to the board regarding membership and the appointment of chairpersons of

the board’s committees;

recommending director compensation and benefits policies;

reviewing its charter at least annually for appropriate revisions; and

recommending to the board other actions related to corporate governance principles and policies.

•

Compensation Committee

As more fully described in its charter, our compensation committee has responsibility for, among other

things:

•

establishing the Company’s philosophy, policies and strategy relative to executive compensation,
including the mix of base salary, short-term and long-term incentive and equity based compensation
within the context of the stated policies and philosophy including management development and
succession planning practices and strategies;

reviewing corporate goals and objectives relevant to compensation of our CEO and other senior
executives including review and approval of performance measures and targets for all executive
officers participating in the annual executive non-equity incentive bonus plan and certify achievement
of performance goals after the annual measurement period to permit bonus payouts under the plan;

determining and approving our CEO’s compensation and making recommendations to the board with
respect to compensation of other executive employees, including any special discretionary
compensation and benefits;

administering our incentive compensation plans and equity based plans and making recommendations
to the board with respect to those plans;

• making recommendations to our board with respect to the compensation of directors;

•

the sole authority to appoint, determine the funding for and oversee the independent compensation
consultant; and

reviewing its charter at least annually for appropriate revisions.

Succession Planning

Our CEO and board of directors review at least annually the succession plan of our CEO and each of our

named executive officers (“NEO” or “NEOs”). The board of directors conducts an annual review of, and
provides approval for, our management development and succession planning practices and strategies.

Our CEO provides an annual report to the board of directors assessing senior management and their

potential successors. As part of this process, contingency plans are presented in the event of our CEO’s
termination of employment for any reason (including death or disability). The report to the board of directors also
contains the CEO’s recommendation as to his successor. The full board of directors has the primary
responsibility to develop succession plans for the CEO position.

Meetings of the Board of Directors and Board and Committee Member Attendance

In fiscal 2012, our board of directors met seven times, the audit committee met four times, the compensation
committee met three times and the governance and nominating committee met three times. The board of directors
and the committees acted by unanimous written consent when required during the last fiscal year. Each board
member attended 75% or more of the aggregate number of meetings of the board, and of the committees on
which he or she served, that were held during the period for which he or she was a director or committee
member, respectively, except as follows. Mr. Hyde and Ms. McCoy each attended 71% of the meetings of the
board of directors. Mr. Weber attended 33% of the meetings of the compensation committee and 67% of the
meetings of the governance and nominating committee. Although the Company does not have a formal policy
requiring members of the board of directors to attend annual shareholder meetings, the Company encourages all
directors to attend each annual shareholder meeting. Four of the then eight board members were in attendance at
our 2012 annual shareholder meeting.

Shareholder Communications with the Board of Directors

The Company has a process by which shareholders may communicate directly with directors, including non-
employee directors, by mailing such communication to the board of directors in care of the Company’s Corporate
Secretary, at the Company’s headquarters in Lynnwood, Washington. The mailing envelope must contain a clear
notation indicating that the enclosed letter is a “Shareholder-Board Communication” or “Shareholder-Director
Communication.” All such letters must identify the author as a shareholder and clearly state whether the intended
recipients are all members of the board or just certain specified individual directors. The Corporate Secretary will
make copies of all such letters and circulate them to the appropriate director or directors. All such
communications will be forwarded to the intended director(s) without editing or screening. If these foregoing
procedures are modified, then updated procedures will be posted on the Company’s corporate website.

Code of Conduct and Ethics

Our board has adopted a code of conduct and ethics applicable to our directors, executive officers, including
our chief financial officer and other of our senior financial officers, and employees in accordance with applicable
rules and regulations of the SEC and Nasdaq. The code of conduct is available at http://ir.zumiez.com under the
“Governance” section.

Corporate Governance Guidelines

Our board has adopted corporate governance guidelines that provide an overview of the governance

structure maintained at the Company and policies related thereto. The guidelines are available at
http://ir.zumiez.com under the “Governance” section.

Executive Compensation Recovery Policy

The Company maintains an executive compensation recovery policy. Pursuant to this policy, the Company

may recover incentive income that was based on the achievement of quantitative performance targets if the
executive officer engaged in fraud or intentional misconduct that resulted in an increase in his or her incentive
income. Incentive income includes all incentive income and compensation that the compensation committee
considers to be appropriate based upon the circumstance.

The compensation committee has the sole discretion to administer this policy and take actions under it,
including soliciting recommendations from the audit committee and the full board of directors and retaining
outside advisors to assist in making its determinations. The actions taken by the compensation committee are
independent of any action imposed by law enforcement agencies, regulators or other authorities.

Director Nomination Procedures

The nominations to the board of directors were completed by the governance and nominating committee.
The governance and nominating committee has established board membership criteria (discussed above, under
the section entitled “Membership Criteria for Board Members”) and the procedures for selecting new directors.

The nominations to the board of directors in fiscal 2012 and through the date of this proxy statement were

completed using procedures in accordance with the charter of the governance and nominating committee
including the director qualifications, criteria and skills as outlined in such charter. These procedures include:

•

Initial review of potential director candidates by the committee as submitted by the independent
directors of the board based on our established criteria for board membership including (without
limitation) experience, skill set, diversity and the ability to act effectively on behalf of the shareholders
and such other criteria as the committee may deem relevant from time to time.

• Each director candidate was put forth for consideration as a director candidate independently by our
independent directors based on their knowledge of the candidates. None of our independent directors
had a relationship with any candidates that would impair his or her independence. Each candidate’s
biography was reviewed by each member of the committee with the intention that each candidate
would bring a unique perspective to benefit our shareholders and management.

•

Interviews of director candidates were conducted by members of the committee and senior
management. These interviews confirmed the committee’s initial conclusion that candidates met the
qualifications, criteria and skills to serve as a director of the Company.

• Reference checks were conducted if further checks were required based on the level of knowledge

about the candidate by members of the committee.

• Background checks were conducted, including criminal, credit and bankruptcy, SEC violations and/or

sanctions, work history and education.

•

Independence questionnaires were completed by candidates and then reviewed by the Company, the
committee and the Company’s outside legal counsel to ensure candidates meet the requirements to be
an independent director for the board, audit committee, compensation committee and the governance
and nominating committee. The review also ensures the candidates positions do not conflict in any
material way with Company business.

• Conclusion to nominate a candidate is based on all of the procedures reviewed previously and the
information attached. It is ensured through these procedures that the candidate appears to be well
qualified to serve on the Company’s board of directors and its committees and appears to meet Nasdaq
and SEC requirements to be able to serve as an independent director and as a member of the audit
committee and any other committee the board may assign to such director.

No fees were paid to any third party search firms in connection with any director nominations.

Travis D. Smith was appointed to our board of directors on August 14, 2012. Mr. Smith was originally

recommended to the Company to join the board by our CEO.

The governance and nominating committee of the board will consider qualified nominees recommended by

shareholders who may submit recommendations to the governance and nominating committee in care of our
Chairman of the Board and Corporate Secretary at the following address:

Board of Directors and Chairman of the Board
c/o Corporate Secretary
Zumiez Inc.
4001 204th Street SW
Lynnwood, Washington 98036

Nominees for director who are recommended by our shareholders will be evaluated in the same manner as

any other nominee for director. Shareholder recommendations for director should include the following
information:

•

the name, age, residence, personal address and business address of the shareholder who intends to
make the nomination and of the person(s) to be nominated;

the principal occupation or employment, the name, type of business and address of the organization in
which such employment is carried on of each proposed nominee and of the shareholder who intends to
make the nomination;

a representation that the shareholder is a holder of record of stock of the Company, including the
number of shares held and the period of holding;

a description of all arrangements or understandings between the shareholder and the recommended
nominee;

such other information regarding the recommended nominee as would be required to be included in a
proxy statement filed pursuant to Regulation 14A promulgated by the SEC pursuant to the Securities
Exchange Act of 1934, as amended; and

the consent of the recommended nominee to serve as a director of the Company if so elected.

The governance and nominating committee may require that the proposed nominee furnish the committee

with other information as it may reasonably request to assist it in determining the eligibility of the proposed
nominee to serve as a director.

To submit a recommendation for director for an upcoming annual shareholder meeting, it is necessary that a

proposing shareholder notify the Company and provide the information set forth previously, no later than
120 days prior to the corresponding date on which the Company’s annual proxy statement is mailed in
connection with the most recent annual meeting.

General Director Nomination Right of All Shareholders

Any shareholder of the Company may nominate one or more persons for election as a director of the

Company at an annual meeting of shareholders if the shareholder complies with the notice, information and
consent provisions contained in Article I, Section 10 of the Company’s bylaws. Specifically, these provisions
require that written notice of a shareholder’s intent to make a nomination for the election of directors be received
by the Corporate Secretary not fewer than 120 days and not more than 150 days prior to the anniversary date of
the prior year’s annual meeting of shareholders.

The Corporate Secretary will send a copy of the Company’s bylaws to any interested shareholder who

requests them.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table provides information regarding the beneficial ownership of our common stock as of

March 18, 2013 by: (i) each of our directors; (ii) each of our NEOs; (iii) all of our executive officers and
directors as a group; and (iv) each person, or group of affiliated persons, known by us to beneficially own more
than 5% percent of our common stock. The table is based upon information supplied by our officers, directors
and principal shareholders and a review of Schedule 13G reports filed with the SEC. Unless otherwise indicated
in the footnotes to the table and subject to community property laws where applicable, we believe that each of the
shareholders named in the table has sole voting and investment power with respect to the shares indicated as
beneficially owned.

Applicable percentages are based on shares outstanding on March 18, 2013, adjusted as required by rules
promulgated by the SEC. These rules generally attribute beneficial ownership of securities to persons who possess
sole or shared voting power or investment power with respect to those securities. In addition, the rules include
shares of common stock issuable pursuant to the exercise of stock options that are either immediately exercisable or
exercisable on or before May 17, 2013, which is 60 days after March 18, 2013. These shares are deemed to be
outstanding and beneficially owned by the person holding those options for the purpose of computing the
percentage ownership of that person, but they are not treated as outstanding for the purpose of computing the
percentage ownership of any other person. Except as noted below, the address for each person that holds 5% or
more of our common stock is c/o Zumiez Inc., 4001 204th Street SW, Lynnwood, Washington 98036.

Name of Beneficial Owner

Thomas D. Campion (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Richard M. Brooks (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Lynn K. Kilbourne (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Christopher C. Work (4)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ford K. Wright (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Chris K. Visser (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
William M. Barnum Jr. (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gerald F. Ryles (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
James M. Weber (9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Matthew L. Hyde (10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sarah (Sally) G. McCoy (11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ernest R. Johnson (12) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Travis D. Smith (13)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Marc D. Stolzman (14) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
All Executive Officers and Directors as a group (14 persons)
. . . . .
T. Rowe Price Associates, Inc. (15) . . . . . . . . . . . . . . . . . . . . . . . . . .
Waddell & Reed Financial, Inc. (16) . . . . . . . . . . . . . . . . . . . . . . . . .
Wasatch Advisors, Inc. (17) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Massachusetts Financial Services Company (18) . . . . . . . . . . . . . . .
BlackRock, Inc. (19) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

* Less than one percent.

Number of Common
Shares Beneficially Owned

Percentage of Shares
Beneficially Owned

4,588,393
3,713,024
273,676
17,065
246,349
4,969
91,482
40,745
32,364
32,364
6,248
6,298
2,255
0
9,055,232
4,795,200
2,505,731
2,285,955
1,967,460
1,634,133

15.2%
12.3%
*
*
*
*
*
*
*
*
*
*
*
*
29.6%
15.2%
8.0%
7.3%
6.3%
5.2%

(1)

Includes shares of common stock held by grantor retained annuity trusts for which Thomas D. Campion is
trustee. Mr. Campion is our Chairman of the Board.

(2) Mr. Brooks is our CEO and a Director.

(3) Consists of 65,612 shares of stock held by Ms. Kilbourne of which 22,056 shares are restricted and 208,064

vested stock options. Ms. Kilbourne is our President and General Merchandising Manager.

(4) Consists of 16,231 shares of stock held by Mr. Work of which 5,461 shares are restricted and 834 vested

stock options. Mr. Work is our Chief Financial Officer.

(5) Consists of 68,781 shares of stock held by Mr. Wright of which 8,802 shares are restricted and 177,568

vested stock options. Mr. Wright is our Executive Vice President of Stores.

(6) Consists of 4,969 shares of stock held by Mr. Visser of which 4,969 shares are restricted. Mr. Visser is our

General Counsel and Corporate Secretary.

(7) Consists of 67,482 shares of stock held by Mr. Barnum of which 2,211 shares are restricted and 24,000

vested stock options. Mr. Barnum is one of our directors.

(8) Consists of 16,745 shares of stock held by Mr. Ryles of which 2,211 shares are restricted and 24,000 vested

stock options. Mr. Ryles is one of our directors.

(9) Consists of 18,364 shares of stock held by Mr. Weber of which 2,211 shares are restricted and 14,000 vested

stock options. Mr. Weber is one of our directors.

(10) Consists of 18,364 shares of stock held by Mr. Hyde of which 2,211 shares are restricted and 14,000 vested

stock options. Mr. Hyde is one of our directors.

(11) Consists of 6,248 shares of stock held by Ms. McCoy of which 2,211 shares are restricted. Ms. McCoy is

one of our directors.

(12) Consists of 6,298 shares of stock held by Mr. Johnson of which 2,211 shares are restricted. Mr. Johnson is

one of our directors.

(13) Consists of 2,255 shares of stock held by Mr. Smith of which 2,255 shares are restricted. Mr. Smith is one of our

directors.

(14) Mr. Stolzman is our former Chief Financial Officer and Secretary. Mr. Stolzman resigned effective

August 23, 2012.

(15) This information is based solely on a Schedule 13G/A filed February 6, 2013 by T. Rowe Price Associates, Inc.
(“Price Associates”). These securities are owned by various individual and institutional investors including
T. Rowe Price New Horizons Fund, Inc. (which owns 2,372,800 shares, representing 7.5% of the shares
outstanding), which Price Associates serves as an investment adviser with power to direct investments and/or sole
power to vote the securities. For purposes of the reporting requirements of the Securities Exchange Act of 1934,
Price Associates is deemed to be a beneficial owner of such securities; however, Price Associates expressly
disclaims that it is, in fact, the beneficial owner of such securities. The business address of T. Rowe Price
Associates, Inc. is 100 E. Pratt Street, Baltimore, Maryland 21202.

(16) This information is based solely on a Schedule 13G/A filed February 7, 2013 by Waddell & Reed Financial, Inc.
The securities reported on are beneficially owned by one or more open-ended investment companies or other
managed accounts which are advised or sub-advised by Ivy Investment Management Company (“IICO”), an
investment advisory subsidiary of Waddell & Reed Financial, Inc. (“WDR”) or Waddell & Reed Investment
Management Company (“WRIMCO”), an investment advisory subsidiary of Waddell & Reed, Inc. (“WRI”).
WRI is a broker-dealer and underwriting subsidiary of Waddell & Reed Financial Services, Inc., a parent holding
company (“WRFSI”). In turn, WRFSI is a subsidiary of WDR, a publicly traded company. The investment
advisory contracts grant IICO and WRIMCO all investment and/or voting power over securities owned by such
advisory clients. The investment sub-advisory contracts grant IICO and WRIMCO investment power over
securities owned by such sub-advisory clients and, in most cases, voting power. Any investment restriction of a
sub-advisory contract does not restrict investment discretion or power in a material manner. Therefore, IICO and/
or WRIMCO may be deemed the beneficial owner of the securities covered by this statement under Rule 13d-3 of
the Securities Exchange Act of 1934 (the “1934 Act”). IICO, WRIMCO, WRI, WRFSI and WDR are of the view
that they are not acting as a “group” for purposes of Section 13(d) under the 1934 Act. Indirect “beneficial
ownership” is attributed to the respective parent companies solely because of the parent companies’ control
relationship to WRIMCO and IICO. The business address of Waddell & Reed Financial, Inc. is 6300 Lamar
Avenue, Overland Park, Kansas 66202.

(17) This information is based solely on a Schedule 13G filed February 14, 2013 by Wasatch Advisors, Inc. The

business address of Wasatch Advisors, Inc. is 150 Social Hall Avenue, Salt Lake City, UT 84111.

(18) This information is based solely on a Schedule 13G filed February 12, 2013 by Massachusetts Financial Services
Company. The business address of Massachusetts Financial Services Company is 111 Huntington Avenue,
Boston, MA 02199.

(19) This information is based solely on a Schedule 13G filed January 30, 2013 by BlackRock, Inc. The business

address of BlackRock, Inc. is 40 East 52nd Street New York, NY 10022.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Exchange Act requires our directors and executive officers, and persons who own more
than 10% of a registered class of our equity securities, to file with the SEC initial reports of ownership and reports
of changes in ownership of our common stock and other equity securities. Officers, directors and greater than 10%
shareholders are required by SEC regulation to furnish us with copies of all Section 16(a) forms they file.

To our knowledge, based solely on a review of the copies of such reports furnished to us and written
representations that no other reports were required, during fiscal 2012, all applicable Section 16(a) filing
requirements were met, and that all such filings were timely except for a late Form 4 report filed on behalf of
Thomas Campion relating to a prior gift of shares.

EXECUTIVE OFFICERS

As of the end of fiscal 2012 the names, ages and positions of the current non-director executive officers of

the Company are listed below, along with their respective business experience during the past five years. No
family relationships exist among any of the directors or executive officers of the Company.

Lynn K. Kilbourne, 50, has served as our President and General Merchandising Manager (“GMM”) since
September 2008. Prior to September 2008 and since September 2004, Ms. Kilbourne served as our Executive
Vice President and GMM. From July 1991 until May 2001, she was with Banana Republic, a subsidiary of
Gap, Inc., in various senior management positions. After leaving Banana Republic, Ms. Kilbourne served as an
independent consultant in the retail industry until she joined Zumiez in September 2004. Ms. Kilbourne holds a
B.A. in Economics and Political Science from Yale University and an M.B.A. from the Harvard University
Graduate School of Business Administration.

Chris K. Visser, 42, has served as our General Counsel and Corporate Secretary since October 2012. From

2001 until October 2012, Mr. Visser was with K&L Gates LLP where he was a partner in the corporate,
securities, and mergers and acquisitions practice group. Mr. Visser also worked as a process engineer with Vista
Chemical Company prior to earning his law degree. Mr. Visser holds a Bachelor of Science degree in Chemical
Engineering from the University of Washington. Mr. Visser also obtained an M.B.A, with a Concentration in
Finance, from the University of Houston and a J.D. from the University of Houston Law Center where he
graduated with academic honors and served as an editor on the Houston Law Review.

Christopher C. Work, 34, has served as Chief Financial Officer since August 2012. Mr. Work has been
employed with the Company since October 2007, where he last served as Vice President, Controller. From
September 2002 to October 2007, Mr. Work was an employee of Ernst & Young LLP, obtaining the level of
Manager. Mr. Work received a Master of Professional Accounting from the University of Washington and a B.A.
in Accountancy from Western Washington University. Mr. Work is a Certified Public Accountant in the State of
Washington.

Ford K. Wright, 45, has served as our Executive Vice President of Stores since March 2007. From May of
2000 through February 2007, he served as the Director of Store Systems. From June 1994 through April 2000,
Mr. Wright has served in Store, District and Regional Management positions. Prior to June of 1994, Mr. Wright
was employed with Nordstrom. Mr. Wright has over 20 years experience in the retail and wholesale clothing
industry.

EXECUTIVE COMPENSATION
COMPENSATION DISCUSSION AND ANALYSIS

Our basis for competitive advantage is our culture—conceived, developed and maintained as a unique and

powerful basis for engendering commitment, accountability, competitiveness and creativity among all of our
employees. The objective of this compensation discussion and analysis is to describe how, for the NEOs, we link
our culture to compensation philosophy and then to compensation strategy; and, to explain how we executed our
compensation strategy during the last fiscal year. While the discussion and analysis focuses on the NEOs in the
compensation tables in this proxy statement, we link culture, compensation philosophy and compensation
strategy throughout the organization from the seasonal sales employee to each of the NEOs.

Value Creation Model

The following summary illustrates how the compensation philosophy and strategies are integrated with and
derived from the Zumiez culture. We believe this integrated approach supports long-term growth in shareholder value.

Zumiez Culture

Compensation
Philosophy

Compensation
Elements

Performance Measures

Shared values

(cid:129)Empowered managers
– through clear
measurements &
accountability
(cid:129)Teaching and learning
– through
comprehensive training
developed to empower
our managers to make
good retail decisions
(cid:129)Competition – creating
opportunities to
compete and
recognizing their
contributions
(cid:129)Fairness and honesty –
through all our
relationships

Externally
competitive

Reward
performance

Fair and
consistent

Drive long-term
shareholder
thinking

Effective blend
of guaranteed
and at-risk
components

For at-risk
components,
effective blend
between short-
term and long-
term

Base Salary

Bonus

Short-Term
Cash Based
Incentives

Stock Option
Grants

Restricted Stock
Grants

Comparable
store sales

Product margin

Diluted earnings
per share

Common stock
price

The Zumiez Culture

While every organization has a culture, even if it is a culture by default, we believe that the Zumiez culture
is unique. We believe it is well defined, understood widely and thoroughly among all employees, reinforced and
exemplified by leaders held accountable for doing so and integrated into the daily practices and processes
throughout the business. We believe the Zumiez culture is a competitive advantage and is built on a set of shared
values that have been in place since the inception of the business. These shared values include:

• Empowered managers—The Zumiez culture pushes decision making down to the appropriate level in
the organization within the context of appropriate guidelines, controls and procedures. This gives our
managers throughout the organization the ability to impact their results creating increased
accountability, clear measurements and a sense of ownership throughout the organization.

• Teaching and learning—Our culture strives to integrate quality teaching and learning experiences

throughout the organization. We do this through a comprehensive training program, which primarily
focuses on sales and customer service training. Our training programs have been developed internally
and are almost exclusively taught internally by Zumiez employees to Zumiez employees. The training
programs have been developed to empower our managers to make good retail decisions.

• Competition—We believe that Zumiez employees enjoy competing. Our entire system is built around
creating opportunities for people to compete and to be recognized for their contributions. This is
reflected in everything we do including empowering managers, building competition into almost all of
our training and in how we recognize the successes of our employees throughout the organization.

• Fairness and honesty—Along with our employees, we strive to be fair and honest in all of our
relationships. This includes how we work with each other, our vendors, our landlords and our
customers.

Culture and Compensation Philosophy

The Zumiez culture guides how we manage our business and it permeates through our compensation

philosophy. We believe our culture itself has value to our employees. Our culture allows our employees
throughout the organization to make appropriate decisions to impact their results as well as the Company’s
financial results. We believe the competitive people we hire and the training we provide helps us generate strong
operating results and we believe that our employees value working in this kind of environment.

The compensation committee believes the purpose of the compensation program for our NEOs is to help

attract, retain, align, motivate and reward executives capable of understanding, committing to, maintaining and
enhancing the culture; and, with culture as a centerpiece of our competitive advantage, establishing and
accomplishing business strategies and goals that we believe makes us an attractive investment for shareholders.
To do so, the compensation committee believes the compensation program should offer compensation
opportunities that:

•

are externally competitive with compensation paid by companies in the market for executive talent;

reward performance by linking compensation to quantitative and qualitative goals that the
compensation committee believes is in the best long-term interest of shareholders;

drive long-term shareholder thinking by delivering a substantial portion of the NEOs compensation or
wealth in the form of equity that is directly linked to our stock price;

are an effective blend of guaranteed and at-risk components, where the proportion of guaranteed pay is
less than average and the proportion of at-risk pay is greater than average when compared against the
competitive market; and

for at-risk components of pay, are an effective balance between short-term and long-term interests of
our shareholders.

The compensation committee believes that at-risk components should result in compensation for the
executive in proportion to and to the extent justified by performance. For Zumiez executives, “performance”
means, first of all, doing the right things—achieving the financial results that clearly drive the creation of
shareholder value. The compensation program must align the interests and motivations of executives with those
of shareholders. Secondly, performance means doing things right—acting as strong, respected and acknowledged
leaders of staff; and, as role models of leadership behavior in the community at-large. We believe that exemplary
executive behavior helps to support sustainable long-term creation of shareholder value.

The compensation committee intends to continually explore, consider and introduce enhanced or new

compensation approaches and elements for NEOs as appropriate.

Compensation Goals and Strategy for NEOs

Simplicity and Transparency. The compensation committee seeks simplicity and transparency in the
compensation program for our NEOs. Therefore, the program focuses on easily understood components of
clearly determinable value—base salary, bonuses, short-term cash based incentives and long-term equity awards.
We refer to the combination of these as “total direct compensation.” The compensation committee does not use
supplemental executive benefits and perquisites that are generally not also made available to our employees.

Attractive Compensation Opportunities. The compensation committee believes in and commits to planning

for internal succession; however, the Company must be positioned to attract and retain high-caliber executive
talent in the external marketplace. It believes it must be positioned to bring in seasoned, proven individuals from
within the industry and beyond who can perform the full scope of their roles from the time of hire. Establishing
and maintaining the ability to attract and retain talent is a top priority for compensation of NEOs. To address this
priority responsibly on behalf of shareholders, the compensation committee works each year to:

• Establish a conservative salary range for each position to guide salary hiring offers and salary increase

decisions.

• Establish a competitive total annual cash compensation opportunity for each position through annual

cash incentives where payout is contingent on performance.

•

Provide opportunities to earn stock incentives in proportions so that the long-term opportunity for each
NEO to earn total direct compensation (salary plus annual cash incentives plus stock incentives) is
above average should shareholders realize above average returns.

Pay-at-Risk. The compensation committee is committed to pay-at-risk. “Pay-at-risk” means compensation

that is earned only upon clear evidence that the interests of shareholders have been served. By design, we believe
the proportion of each NEOs total direct compensation that is at-risk is greater than what is typically observed in
the marketplace. Conservative base salaries are combined with above-average cash and stock incentives to create
a total package that is competitive. We believe the pay-at risk philosophy is evidenced by the fact that no NEO
has been paid the maximum total incentive compensation in our history of being a public company.

Pay-for-Performance. The compensation committee believes pay-at-risk enables pay-for-performance. It
allows major portions of total direct compensation to be paid only when short-term and long-term interests of
shareholders have been met.

For short-term (annual) pay-for-performance for the NEOs as a group, the compensation committee has the

following goals:

• Drive alignment around three measures of performance: (1) comparable store sales results, (2) product
margin and (3) diluted earnings per share. The compensation committee believes these are the best
measures because they have the largest impact on Zumiez ability to grow profitability and provide
clarity to individual executives. We calculate these performance measures as follows:

• Comparable store sales—We report “comparable store sales” based on net sales beginning on the
first anniversary of the first day of operation of a new store or ecommerce business. We operate a
sales strategy that integrates our stores with our ecommerce platform. There is significant
interaction between our in-store sales and our ecommerce sales channels and we believe that they
are utilized in tandem to serve our customers. Therefore, our comparable store sales also include
our ecommerce sales. Changes in our comparable store sales between two periods are based on net
sales of “in-store” or ecommerce businesses which were in operation during both of the two
periods being compared and, if a in-store or ecommerce business is included in the calculation of
comparable store sales for only a portion of one of the two periods being compared, then that in-
store or ecommerce business is included in the calculation for only the comparable portion of the
other period. Any change in square footage of an existing comparable store, including remodels
and relocations, does not eliminate that store from inclusion in the calculation of comparable store
sales. Any store or ecommerce business that we acquire will be included in the calculation of
comparable store sales after the first anniversary of the acquisition date.

•

Product margin—Product margin is calculated as net sales less cost of goods sold, divided by our
net sales. For purposes of this calculation, our net sales consist of revenue recognized upon
purchase by our customers, net of actual sales returns, excluding shipping revenue. For purposes

of this calculation, our cost of goods sold consist of the cost of goods purchased from our private
label vendors, including importing and inbound freight costs, and the cost of goods purchased
from third party manufacturers, sold to our customers.

• Diluted earnings per share—Diluted earnings per share is calculated in accordance with GAAP.

•

Provide for the risk of zero annual short-term cash based incentives payout should minimum
performance expectations not be met.

• Grant of awards that upon achievement of target performance measures, are in the best long-term

interests of the shareholders.

•

Provide for pay-at-risk, i.e., performance expectations that are challenging, but achievable.

• Communicate proactively to all NEOs performance expectations in order to establish clear incentive

for achievement.

•

Provide for upside compensation potential results that are beyond Company expectations.

Set forth prudent limits, or caps, on upside potential to ensure no possibility of payouts that might be
judged by shareholders as unjustifiable or excessive.

For long-term pay-for-performance (long-term equity incentive), the compensation committee’s goal is to
link the ultimate compensation amounts realized by NEOs directly and exclusively to the Company’s long-term
common stock performance. To do so, the compensation committee makes use of stock-based awards for all
NEOs (except as noted, below, under the section heading “The Compensation Decision-making Process”).

The compensation committee has used, and intends to make use of, both gain-based stock awards (stock
options) and full-value stock awards (restricted stock). The compensation committee determines on an annual
basis for each NEO the total value of an award, based on a competitive range, that best reflects in the
compensation committee’s judgment both the individual’s long-term track record of success and potential for
long-term value-added future contributions.

Gain-based awards have widespread use and have upside potential that can be highly motivational.

However, the compensation committee: (i) is aware that gain-based awards have no downside potential similar to
that of holding outright shares of stock; (ii) recognizes that the exclusive and substantial use of gain-based
awards has been historically noted by the investment community as a potential contributor to misguided or
unacceptable decisions on the part of executives in certain other companies; and, (iii) knows that historic
accounting advantages for the use of gain-based awards no longer exist. In addition, the compensation committee
is aware of the executive compensation trend among publicly-held companies to utilize less gain-based awards in
favor of full-value awards such as restricted stock. Therefore, the compensation committee continues to review
and has deployed full-value restricted stock awards to help offset and balance the disadvantages of gain-based
awards for achieving pay-for-performance and other compensation goals while retaining the advantages of gain-
based awards. The mix of gain-based awards and full-value awards is evaluated annually by the compensation
committee and adjusted based on input from the compensation consultant and the CEO, all in the context of the
marketplace, our compensation philosophy, and what the compensation committee believes is in the best interest
of the shareholders and the NEOs. The compensation committee also allows some deference to the CEO in the
allocation between stock options and restricted stock, so long as the total compensation charge to Zumiez is equal
to what was approved by the compensation committee.

Executive Officer Continuity. Undesirable, unanticipated or untimely departure of an executive officer is a
risk to the Company that the compensation committee works to avoid. The risk stems from the potentially high
costs of recruiting, relocation, operational disruption, reduced morale, turnover ripple effects among staff,
negative external perceptions, reduced external confidence and lost intellectual capital.

The compensation committee encourages executive officer continuity by granting stock awards to an NEO

where the ultimate realization of value not only depends on stock price, but also on the NEO remaining with
Zumiez for many years. Accordingly, if a NEO were to depart from Zumiez then he or she could forfeit
substantial amounts of unrealized compensation.

Shareholder Mentality. We believe it is in the best interests of shareholders for our leaders to feel, think and

act like shareholders, and to have a “shareholder mentality” as they go about envisioning, planning for and
executing operations. The compensation committee seeks to cultivate NEOs with a shareholder mentality by
having NEOs receive, accumulate and maintain significant ownership positions in Zumiez through annual equity
grants.

Within this concept, through equity awards granted over time, each of our NEOs has the ability to establish

and maintain a valuable ownership in Zumiez.

Summary of the Elements of NEO Compensation

The compensation committee utilizes five primary elements for compensating NEOs:

• Base Salary

• Non-Equity Incentive Plan Compensation (“short-term cash based incentives”)

• Bonus

•

Stock Option Grants

• Restricted Stock Grants

Total Pay Philosophy—Our “Total Pay” compensation philosophy is designed to recognize and reward the

contributions of all employees, including executives, in achieving our strategic goals and business objectives,
while aligning our compensation program with shareholder interests. We regularly assess our total pay package,
and we adjust it as appropriate to remain competitive and to enable us to attract and retain our NEOs. We believe
our total pay practices motivate our executives to build long-term shareholder value.

Base Salary is a pre-set fixed cash amount that is delivered regularly in equal portions through the year.
Each NEOs annual base salary rate is reviewed from time to time and at least annually by the compensation
committee. Outside of the CEO, the review is based on recommendations of the CEO.

Short-Term Cash Based Incentives are based on pre-set opportunities for cash awards to be paid after the

end of the year based on performance for the year. Actual payouts may be between zero and twice the target
amount, where the target amount is that established for each NEO by the compensation committee if target goals
are achieved.

Bonuses may be awarded from time to time in order to attract and retain key NEOs. These bonuses, when

awarded, are generally in addition to those earned from participating in short-term cash based incentives and are
considered in the executive’s total direct compensation. The intention is to pay such bonuses rarely and in modest
amounts if and only if other elements of the executive pay system do not respond to outstanding achievements
clearly pursued and delivered in the interests of shareholders.

Stock Option Grants are opportunities granted from time to time (usually annually or at the time of hiring)
to an NEO to purchase our common stock at some future time at a pre-established fixed price set at the time of
grant. This price is the actual market price of the stock at the time of grant. The right to exercise options in a
particular grant is accumulated over a number of years, and is subject to vesting based upon continued
employment with us.

Restricted Stock Grants are awards of common voting shares of stock that are granted from time to time
(usually annually or at the time of hiring) to each NEO. The right to earn the stock is contingent upon continued
employment over a period of time.

The compensation committee views the elements of total direct compensation for NEOs as an integrated

package to achieve all of the compensation goals described in the immediately preceding section of this
discussion.

Fiscal 2012—A Review of This Past Year

In fiscal 2012 Zumiez achieved record sales and earnings levels and continued to build on the momentum
we had seen in fiscal 2011. The charts below show net sales and diluted earnings per share (“diluted EPS”) on a
GAAP basis for fiscal 2011 and 2012 and the percentage growth in fiscal 2012.

Net Sales
(in millions)

+20.4%

$555.9

$669.4

$700.0

$600.0

$500.0

$400.0

$300.0

$200.0

$100.0

Diluted EPS +12.5%

$1.35

$1.20

$1.40

$1.35

$1.30

$1.25

$1.20

$1.15

$1.10

Fiscal 2011

Fiscal 2012

Fiscal 2011

Fiscal 2012

We had strong momentum entering fiscal 2012 and expected our financial performance would continue to
reflect increasing year over year performance in both net sales and diluted earnings per share. Considering the
prior year performance and the plans in motion for fiscal 2012, the compensation committee granted salary
increases to the NEOs except our Chairman of the Board, to keep pay in line with the stated compensation
philosophy and market data.

The compensation committee believes the compensation structure outlined in previous years is still relevant

and appropriate, so the short-term cash based incentives and long-term equity incentives components of
compensation were designed to follow the same methodology and is discussed in further detail below.

We believe the strong fiscal 2011 and fiscal 2012 results are due to focusing on long-term winning solutions

and the unique business model and compensation structure that have been formed over many years. We
continued to make key infrastructure and people investments that resonated with our customers. In July 2012, we
completed the acquisition of Blue Tomato. Blue Tomato is a multi-channel retailer for board sports and related
apparel and footwear in the European marketplace. The Blue Tomato acquisition represents a presence in the
European action sports market with an established brand identity and operational philosophies that are
strategically aligned with Zumiez.

We believe that by making these key investments over many years and looking at financial results over a
longer time horizon will provide a better long-term return for our investors; and since owned stock or stock based
awards are the material component of our NEOs compensation and wealth creation, we believe our compensation
structure aligns management’s and shareholders’ interests.

Due to our executive compensation programs emphasis on pay for performance and pay at risk,

compensation awarded to the NEOs for fiscal 2012 reflected Zumiez’ strong results. As shown below, for the
named executive officers as a group, excluding the Chairman and the CEO, pay at risk and performance-based

pay for fiscal 2012 comprised an average of approximately 63% and 44%, respectively, of the total compensation
as shown in the Summary Compensation Table. We have excluded our Chairman and CEO due to the difference
in the compensation structure for the Chairman and CEO, who beneficially own 15.2% and 12.3% of the
Company as of March 18, 2013, respectively, and have not received equity awards since before our initial public
offering as discussed further under the section heading, “The Compensation Decision-making Process.”

Compensation Elements as a Percentage
of Total Compensation

At-risk pay
63%

25%

19%

19%
1%

36%

Performance-based pay
44%

Option Awards

Non-Equity Incentive
Plan Compensation

Stock Awards

All Other Compensation

Salary

Fiscal 2013—A Look at the Upcoming Year

While the results of fiscal 2012 were positive, we recognize that many consumers continue to face challenging
economic conditions and uncertainty. Further as we enter fiscal 2013, consumers continue to confront both domestic
and global economic news that cause concern in the retail environment and lead us to be cautious in our outlook for
the coming year. The compensation committee evaluated compensation for fiscal 2012 with an eye toward
balancing retention of key executive officers with our pay for performance principles and anticipated costs to the
Company. With this in mind, the compensation committee kept the same elements of compensation for fiscal 2013
as the elements in place for fiscal 2012. As such, fiscal 2012 target total direct compensation consists of base salary,
annual short-term cash based incentives, bonus and long-term equity incentive compensation in the form of stock
options awards and restricted stock awards. The compensation committee believes this combination of elements of
compensation is the appropriate mix to motivate future performance, drive Company results and retain executive
officers. The compensation committee will continue to evaluate both quantitative and qualitative performance
results relative to internal goals and standards as well as industry averages when evaluating and determining total
direct compensation rewards and opportunities for its NEOs.

Base Salary

In March 2012, the compensation committee met and reviewed the evaluations of the NEOs and the overall
performance of the Company against three objective measures; (1) comparable store sales performance, (2) product
margin and (3) diluted earnings per share. Based upon our performance in fiscal 2011 and the contributions of the
NEOs towards achieving these results, the following base salaries for fiscal 2012 were awarded:

Executive Officer

Fiscal 2012
Base Salary (1)

Increase
Over Prior
Fiscal Year

Thomas D. Campion, Chairman of the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Richard M. Brooks, Chief Executive Officer and Director
. . . . . . . . . . . . . . . . . . . . . .
Lynn K. Kilbourne, President and General Merchandising Manager . . . . . . . . . . . . . . .
Christopher C. Work, Chief Financial Officer (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ford K. Wright, Executive Vice President of Stores . . . . . . . . . . . . . . . . . . . . . . . . . . .
Marc D. Stolzman, former Chief Financial Officer and Secretary (3) . . . . . . . . . . . . . .

$306,600
$631,600
$489,250
$210,000
$278,250
$319,250

0.0%
3.0%
3.0%
N/A
3.0%
2.1%

(1) Reflects annualized base salary as of the fiscal year end, with the exception of Mr. Stolzman as noted below.

Refer to the Summary Compensation Table for actual base salary paid in fiscal 2012.

(2) Mr. Work was appointed as our Chief Financial Officer effective August 23, 2012 and his base salary for the
remainder of fiscal 2012 was set at $210,000 per year. Mr. Work previously served as our Vice President and
Controller.

(3) Mr. Stolzman resigned as the Company’s Chief Financial Officer and Secretary in August of 2012. His

annualized salary for fiscal 2012 was set at $319,250.

The compensation committee sets executive base salaries at levels it believes are competitive based on each
individual executive’s role and responsibilities. The compensation committee reviews base salaries for executive
officers at the time of hire and thereafter on an annual basis. The compensation committee may also review base
salary at the time of promotion or other significant changes in responsibilities. Base salary changes also impact
target annual incentive bonus amounts, and actual annual incentive bonus payouts, because they are based on a
percentage of base salary. When reviewing each executive’s base salary, the compensation committee considers the
level of responsibility and complexity of the executive’s job, whether individual performance in the prior year was
particularly strong or weak, and the salaries paid for the same or similar positions based on analysis of the
competitive market. Consistent with the philosophy discussed previously, our executive base salaries generally are
set at less than the median (at the 40th percentile) for comparable positions based on analysis of the competitive
market.

Short-Term Cash Based Incentives

In March 2012, the compensation committee approved the terms of the fiscal 2012 short-term cash based

incentives. Our NEOs short-term cash based incentives are targeted at approximately 0.2% of sales and 0.5% of
sales at maximum payout. The short-term cash based incentives is appropriate to provide for increased payouts due
to the significant shareholder returns commonly generated by above-target comparable store sales, product margin
and diluted earnings per share performance. The compensation committee has the discretion under the plan to
reduce the awards paid under the plan, but do not have discretion to increase payouts that are based on achievement
of the objective performance goals or make a payout based on the objective performance goals if the first threshold
targets are not achieved. All of our executives are subject to our Executive Compensation Recovery Policy, which
further mitigates excessive risk taking. No payouts are made until audited financial results are received, reviewed
and approved by the audit committee at our March meeting after our fiscal year has ended.

For each of the three performance measures, comparable store sales, product margin and diluted earnings per

share, the compensation committee established performance thresholds for the NEOs. The first threshold relates to a
minimum acceptable level of financial performance. Each succeeding threshold is designed to reward the NEOs
based upon the improved financial performance of the business. The second threshold is the target threshold. The
thresholds above the target threshold each pay out a higher percentage of base salary culminating in the top
threshold, which is designed as a stretch challenge. The compensation committee believes these goals are not easily
achieved; and, in the last seven years, no NEO has achieved all three of the stretch challenge measurement goals.
The following table shows the performance thresholds for each measure for fiscal 2012:

Objective Measure

Performance Threshold

Target

Comparable Store Sales Growth . . . . . . .
Product Margin Improvement . . . . . . . . .

3.5%

5.5%

7.5%

9.0%

11.0%

Last year minus

Last year plus

Diluted Earnings Per Share . . . . . . . . . . . $
Diluted Earnings Per Share Growth . . . .

0.1%
1.43 $
19.2%

0.0%
1.50 $
25.0%

0.2%
1.58 $
31.7%

0.4%

1.69
40.8%

0.3%
1.37 $
14.2%

The following table represents the percentage of the respective NEOs base salary that will be earned upon

achievement of the performance thresholds (“Threshold Percentage”):

Executive Officer

Performance Threshold

Thomas D. Campion, Chairman of the Board . . . . . . . . . . . . . . . . . . . . . . . . . . .
Richard M. Brooks, Chief Executive Officer and Director
. . . . . . . . . . . . . . . .
Lynn K. Kilbourne, President and General Merchandising Manager . . . . . . . . .
Christopher C. Work, Chief Financial Officer . . . . . . . . . . . . . . . . . . . . . . . . . .
Ford K. Wright, Executive Vice President of Stores . . . . . . . . . . . . . . . . . . . . .
Marc D. Stolzman, former Chief Financial Officer and Secretary . . . . . . . . . . .

16% 65% 98% 114% 130%
23% 90% 135% 158% 180%
20% 80% 120% 140% 160%
13% 50% 75% 88% 100%
16% 65% 98% 114% 130%
16% 65% 98% 114% 130%

The threshold percentages in the table above are multiplied by the percentages in the following table for each
performance threshold achieved (“Objective Measure Weighting Percentage”). The compensation committee weights
each threshold for each of the NEOs based upon that individual’s ability to impact the measure. For example, our
Executive Vice President of Stores is more heavily weighted on the comparable store sales objective measure, while
our President and General Merchandising Manager is more heavily weighted on product margin.

Executive Officer

Objective Measure

Comparable
Store Sales

Diluted
Earnings Per
Share Growth

Product
Margin

Thomas D. Campion, Chairman of the Board . . . . . . . . . . . . . . . . . . . . . . . . .
Richard M. Brooks, Chief Executive Officer and Director . . . . . . . . . . . . . . .
Lynn K. Kilbourne, President and General Merchandising Manager . . . . . . .
Christopher C. Work, Chief Financial Officer
. . . . . . . . . . . . . . . . . . . . . . . .
Ford K. Wright, Executive Vice President of Stores . . . . . . . . . . . . . . . . . . . .
Marc D. Stolzman, former Chief Financial Officer and Secretary . . . . . . . . .

30%
30%
30%
30%
40%
30%

40%
40%
40%
50%
40%
50%

30%
30%
30%
20%
20%
20%

Therefore, for each performance threshold achieved, the calculation of the short-term cash based incentive

earned is as follows:

Base Salary ($) x Threshold Percentage x Objective Measure Weighting Percentage

During fiscal 2012, we achieved the level one performance threshold for comparable store sales growth of
5.0%, the level four performance threshold for product margin improvement of last year plus 0.3% and the level
two (or target) performance threshold for diluted earnings per share of $1.45. It should be noted that these
performance threshold achievements do not take into account any results attributable to our acquisition of Blue
Tomato, which was completed in July 2012. The compensation committee elected to exclude any results
attributable to Blue Tomato because the acquisition was not contemplated or accounted for when the
compensation committee set performance threshold targets for fiscal 2012.

Short-term cash based incentive awards for meeting these achievements were paid to the NEOs for fiscal

2012 in March 2013. The short-term cash based incentives target and compensation paid to the NEOs for fiscal
2012 are as follows:

Executive Officer

Short-Term
Cash Based
Incentive
Compensation
Target

Short-Term
Cash Based
Incentive
Compensation
Paid

Thomas D. Campion, Chairman of the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Richard M. Brooks, Chief Executive Officer and Director . . . . . . . . . . . . . . . . . . . . .
Lynn K. Kilbourne, President and General Merchandising Manager . . . . . . . . . . . . .
Christopher C. Work, Chief Financial Officer (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ford K. Wright, Executive Vice President of Stores . . . . . . . . . . . . . . . . . . . . . . . . . .
Marc D. Stolzman, former Chief Financial Officer and Secretary (2) . . . . . . . . . . . .

$199,290
$568,350
$391,400
$ 46,132
$180,863
$207,350

$199,290
$568,350
$391,400
$ 54,501
$153,733
$ —

(1) Mr. Work was appointed as our Chief Financial Officer effective August 23, 2012 and received a short-term
cash based incentive compensation prorated based on the length of service as our Chief Financial Officer in
fiscal 2012 and as our Vice President and Controller. Mr. Work previously served as our Vice President and
Controller. Mr. Work’s short-term cash based incentive compensation target with respect to his appointment
as our CFO on an annualized basis was $105,000.

(2) Mr. Stolzman resigned as the Company’s Chief Financial Officer and Secretary in August of 2012 and did

not receive short-term cash based incentive compensation for fiscal 2012.

Bonus

While we continue to open new stores and invest for the future, and have been for many years, the
compensation committee recognizes the uncertain economic environment that has the potential to negatively
impact virtually every industry including consumer discretionary spending businesses such as ours. The
compensation committee recognizes that in some circumstances it may be advisable to establish and pay
discretionary bonuses in order to reward NEOs for managing the business during difficult economic conditions.
For example, in a situation where at the beginning of a fiscal year there was believed to be a wide range of
possible financial outcomes, this variability may make it difficult to set targets for short-term cash based
incentives. Accordingly, at the end of the fiscal year the compensation committee retains the discretion to award
a bonus if the NEOs were able to achieve meaningful results during the fiscal year by managing the business,
such as in the following ways:

• Cash and marketable securities position at year-end versus plan and prior year.

• Working capital versus plan and prior year.

• Capital spending versus plan and prior year.

• Operating income and diluted earnings per share performance for the year versus plan and the prior

year.

• The current year’s performance relative to driving long-term value creation.

We may also award discretionary cash bonuses from time to time in order to attract and retain key NEOs.

The intention is to pay such bonuses rarely and in modest amounts if an only if other elements of the

executive pay system to not respond to outstanding achievements clearly pursued and delivered in the interests of
our shareholders.

Long-Term Equity Incentives

The compensation committee uses long-term equity incentives as a significant component of total

compensation consistent with the culture and compensation philosophy. The compensation committee continues
to believe in the importance of equity compensation for all executive officers and issues equity incentives
broadly through the management population.

Additionally, because we do not have a pension or a supplemental executive retirement plan, we believe our
executives should plan for their retirement substantially through potential wealth accumulation from equity gains.

Long-term equity incentive awards are determined through a combination of the Company’s performance,

execution of our total compensation strategy of rewarding executives and providing a foundation for wealth
building. Our stock option awards generally have a ten-year term and typically vest 25% per year. Our restricted
stock awards generally vest 33% per year.

The compensation committee met in March 2012 and considered the performance of the Company, its
overall compensation strategy and the level of equity grants to align the NEOs with shareholders. Based on the
compensation committee’s deliberations, the following equity incentive awards were granted:

Executive Officer

Thomas D. Campion, Chairman of the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Richard M. Brooks, Chief Executive Officer and Director . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Lynn K. Kilbourne, President and General Merchandising Manager . . . . . . . . . . . . . . . . . . . .
Christopher C. Work, Chief Financial Officer (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ford K. Wright, Executive Vice President of Stores . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Marc D. Stolzman, former Chief Financial Officer and Secretary . . . . . . . . . . . . . . . . . . . . . .

Restricted
Stock
Grants

—
—
8,548
1,833
3,457
3,949

Stock
Option
Grants

—
—
13,985
13,066
5,655
6,460

(1) Mr. Work was appointed as our Chief Financial Officer effective August 23, 2012 and received an initial

grant of stock options of 13,066 in connection with his new appointment.

The compensation committee believes the levels of grants are appropriate, consistent with its compensation

strategy and provide a meaningful alignment of the NEOs with the Company’s shareholders.

Equity Grant Timing Practices. All stock options granted at Zumiez have an exercise price equal to the
closing market price of our stock on the grant date. Regular annual grants for employees are approved at the
March compensation committee and board meetings, and the grant date for such annual grants is generally the
second business day after the public release of fiscal year-end earnings. The grants are approved as formulas
based on a specified dollar amount and approved dilution percentages; the number of shares and exercise price
for each option grant are determined based on the closing market price of our stock on the grant date, and the
number of shares for each restricted stock grant is determined by dividing the dollar amount by the closing
market price of our stock on the grant date. The board gives the CEO the ability to grant a small number of equity
awards for the current fiscal year at the March board meeting for new hires and promotions.

Executive Compensation and Change in Net Wealth of Zumiez Stock Compare to Total Shareholder
Return and Diluted Earnings Per Share Performance

The following summary charts illustrate, over the previous five fiscal years, the relationship of the
percentage change in executive compensation earned and change in net wealth of Zumiez stock value (“NEO
Compensation and Wealth”) to total shareholder return and diluted earnings per share performance. For a
discussion of how NEO Compensation and Wealth, total shareholder return and diluted earnings per share
performance are calculated, please refer to the footnotes of these charts. Additionally, refer to our Summary
Compensation Table for a summary of executive compensation calculated in accordance with SEC rules and
regulations.

Chairman and Chief Executive Officer (1)

Other NEOs (4)

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-20%

-40%

-60%

2008

2009

2010

2011

2012

2008

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2012

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150%

100%

50%

-50%

-100%

-150%

-200%

200%

150%

100%

50%

-50%

-100%

-150%

-200%

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NEO Compensation and
Wealth (2)

Total Shareholder Return (3)

Diluted EPS Performance (3)

NEO Compensation and
Wealth (2)

Total Shareholder Return (3)

Diluted EPS Performance (3)

(1) We have shown the comparison of our Chairman of the Board and Chief Executive Officer value to

performance separately from the other NEOs due to the difference in the compensation structure for the
Chairman and CEO (who beneficially own 15.2% and 12.3% of the Company as of March 18, 2013,
respectively, and have not received equity awards since the time before our initial public offering).

(2) NEO Compensation and Wealth is calculated based on (1) the cash compensation earned during the fiscal
year (Salary, Bonus and Non-Equity Incentive Plan Compensation from the Summary Compensation
Table), (2) all other compensation received during the fiscal year (All Other Compensation from the
Summary Compensation Table), (3) the change in the ending value of owned stock, stock awards granted
and in-the-money stock option awards and (4) realized gains on sales of stock.

(3) Total shareholder return is measured by the percentage change in stock price as of the end of the fiscal year;
diluted earnings per share (“diluted EPS”) performance is measured by the percentage change in annual
diluted earnings per share.

(4) This chart does not include Mr. Work as he was promoted to Chief Financial Officer in August 2012 and

therefore does not have a comparable percentage change in NEO Compensation and Wealth from the prior
years. Additionally, we have removed the NEO Compensation and Wealth for Mr. Stolzman from the chart
as he resigned from the Company effective August 2012.

Who is Involved in Compensation Decisions for NEOs

The role of the compensation committee—The compensation committee oversees and governs the
compensation of the NEOs. The compensation committee is currently composed of three independent outside
directors. Its top priority is aligning the interests of the NEOs with those of shareholders and motivating them in
the most effective manner possible to create maximum long-term shareholder value. The compensation
committee’s responsibilities are to:

• Establish and articulate the philosophy, rationale and strategy for compensating all NEOs.

• Approve and oversee group and individual compensation plans designed to fulfill our philosophy and

strategy.

• Develop, recommend and justify to the board all compensation decisions and actions for the CEO.

• Review and approve all compensation decisions and actions for other NEOs.

• Review and approve any up-front performance measures, goals, standards, weightings and formulas

that may be used to determine future conditional awards for NEOs.

• Ensure the ongoing success of our compensation program for NEOs by seeking, pursuing, evaluating

and implementing improvements.

• Review total compensation compared to compensation opportunities and practices in the competitive

market for executive talent.

• Evaluate the enterprise risk associated with all forms of compensation.

• Appoint, determine the funding for, and oversee the independent compensation consultant.

The role of NEOs—The NEOs, and in particular the CEO, provide and explain information requested by the
compensation committee and are present at compensation committee meetings as requested by the compensation
committee. The NEOs are not present during deliberations or determination of their respective compensation. On
behalf of the compensation committee, the CEO has the following specific responsibilities:

• Develop, recommend and justify, to the compensation committee, compensation decisions and actions

for NEOs other than the CEO.

• Develop, recommend and justify, to the compensation committee, any up-front performance measures,
goals, standards, weightings and formulas that may be used to determine future conditional awards for
the compensation program for NEOs.

• Report, to the compensation committee, experiences with the compensation program for NEOs and

present any perceived opportunities for improvement.

• Communicate appropriate information about the compensation committee’s actions and decisions to

the other NEOs.

The role of external advisors—At the compensation committee’s discretion, it may engage and consult with

external advisors as it determines necessary to assist in the execution of its duties. External advisors have the
following responsibilities:

•

Provide research, analysis and expert opinions, on an as-requested basis, to assist the compensation
committee in education, deliberations and decision-making.

• Maintain independence from our management.

•

Interact with members of management only with the approval of the chair of the compensation
committee.

All external advisors are engaged directly by the compensation committee and independently of the

management of the Company.

The compensation committee periodically engages a compensation consultant, Ascend Consulting, to work

with the compensation committee on its compensation deliberations. During fiscal 2012, the compensation
committee asked the consultant to provide an assessment of compensation levels and advise the compensation
committee on compensation strategies based on a market analysis taking into account recruiting goals, and
retaining and motivating talent to build shareholder value. The compensation committee and the Company
believe the compensation consultant is independent of Zumiez and our management.

The role of outside counsel—The compensation committee has consulted with outside legal counsel to
advise on its deliberations. During fiscal 2012, outside legal counsel attended compensation committee meetings
as deemed appropriate by the compensation committee and was also available between compensation committee
meetings to advise the compensation committee.

The Compensation Decision-making Process

The compensation committee gathers together information to help it assess compensation for the NEOs,

including:

• Tally sheets—We use tally sheets for each of the NEOs to summarize the significant components of

compensation. At Zumiez, the components of compensation primarily include base salary, short-term
cash based incentives, bonuses, equity incentives, 401K discretionary match and merchandise
discounts. The tally sheets are compared to targeted total compensation. The tally sheets are used to
help prepare the tables that follow this compensation discussion and analysis.

• Competitive Compensation Analysis—At the compensation committee’s direction, the compensation
consultant developed and delivered analysis of competitive compensation for each NEO position.
Analysis was performed using publicly-available information on executive pay levels compiled from
the most recently available proxy statements of publicly-held companies. The focus was on selected
samples of retail companies that best reflect the competitive market for executive talent: those of
similar size, business profile and executive compensation practices. Supplemental analyses for the
retail sector as a whole and across business sectors in both the Pacific Northwest and nationwide were
also conducted. These, along with application of generally accepted methods of statistical analysis,
helped ensure the accuracy, validity, reliability and defensibility of results. On the basis of this rigorous
approach, the compensation consultant provided expert opinions and conclusions to the compensation
committee about targets for base salary, short-term cash based incentives and long-term equity
incentives for our NEO roles. The committee used this information to ensure that our stated philosophy
and strategy for aligning executive compensation opportunities with the competitive market has been
and continues to be fulfilled.

•

Fiscal 2012 results—The compensation committee has access to fiscal 2012 operating plans and
budgets as approved by the board of directors in March 2012. Management updates the compensation
committee and the board on actual performance compared to budgets and summarizes for the
compensation committee how the Company and the NEOs performed against the performance targets.

Fiscal 2013 operating and financial plans—The compensation committee also receives the operating
plan and budgets for fiscal 2013 as approved by the Company’s board of directors. The compensation
committee uses this information to help establish performance targets for the upcoming fiscal year.

• Audited results—The compensation committee reviews the final audited results to confirm that

performance targets were achieved. No incentive awards are made until audited results are received by
the board.

• Wealth creation schedules—The compensation committee requests that management prepare wealth

creation schedules for each NEO showing accumulated equity (both vested and unvested), the amount
of vested equity awards exercised and the related pre-tax proceeds.

•

Performance of teen specialty retailers—The compensation committee requests that management
prepare a schedule for a group of teen retailers comparing comparable-store sales results for the last
four fiscal years and the percentage change in diluted earnings per share comparing the most recent
year-end results to the previous year. The teen retailers include: Abercrombie & Fitch, Aeropostale,
American Eagle, Hot Topic, Tilly’s and Pacific Sunwear. The group was selected because they are
generally considered to be leading lifestyle retailers in the teen market. All of the information for these
retailers was summarized from publicly available date. The compensation committee compares our
relative performance as an additional data point understanding that all of these companies are larger
and may have significantly different business models with significantly different growth profiles.

• Evaluations—The compensation committee receives a self-evaluation and confidential upward
evaluations of the CEO and summary evaluations of the remaining NEOs. The compensation
committee chair solicits the full membership of the board for feedback on the CEO’s performance and
prepares the CEO’s annual evaluation for review by the full compensation committee.

The compensation committee thoroughly and systematically reviews and discusses all information
submitted. It asks management to clarify and supplement as appropriate. The committee then works with its
consultant to determine fair and competitive compensation awards and opportunities for each of the NEOs.

The compensation committee currently structures the NEO compensation program to:

•

Provide conservative (40th percentile) base salary opportunities against the Company’s competitive
market for executive compensation talent.

• Establish average (50th percentile) total cash compensation opportunities (base salary, bonus and Short-

Term Cash Based Incentives) against the competitive market.

•

Provide long-term equity-based awards at the 50th percentile when compared to competitive practices
for comparable roles. In the case of our Chairman and our CEO who beneficially own 15.2% and
12.3% of the Company, respectively, the compensation committee has concluded that each executive
owns a sufficient amount of equity to align them with the long-term interests of shareholders. Because
of this, neither our Chairman nor our CEO has received equity grants since before the Company’s
initial public offering.

The compensation committee evaluates this approach to total direct compensation on an annual basis to best

maintain alignment of the interests of NEO’s with the long-term economic interests of shareholders, given the
maturity, complexity and size of the business. Included is a thorough review of the approach to the Chairman and
CEO, where the committee reserves the right to provide additional equity-based awards to the incumbents if it
determines doing so is in the best interests of shareholders and/or is needed to best reflect competitive practices.

During its deliberations, the compensation committee also considers:

• Long-term wealth accumulation—the accumulated wealth from previous equity incentives granted to

each NEO.

•

Internal pay equity—the relationship between the compensation of our CEO and the other NEOs, as
well as staff at-large.

There is discretion inherent in the compensation committee’s role of establishing compensation for the

NEOs. The compensation committee has attempted to minimize discretion by focusing on the three objective
financial measures it considers to be the long-term drivers of the Company’s business: comparable store sales,
product margin and diluted earnings per share. These three measures have historically been used exclusively to
determine the short-term cash based incentives and are also key considerations in determining changes to base
salary and long-term equity incentive awards. Some discretion is used by the compensation committee in
evaluating the qualitative performance of the NEOs in determining base salary adjustments and payment of

discretionary bonuses. Some discretion is also used in the granting of long-term equity incentive awards to help
NEOs build wealth through ownership of Zumiez stock. However, in all of these uses of discretion the
compensation committee is also governed by the overall compensation philosophy; and, is guided by explicit
competitive targets and ranges of reasonableness.

In making its final decisions, the committee works to ensure that all outcomes are thoroughly justifiable and

defensible as well as fair and effective from all critical perspectives: those of the full board, shareholders,
objective external experts and the NEOs themselves.

Advisory Vote on Executive Compensation. In May of 2011 the shareholders of the Company approved the

Company’s executive compensation in an advisory vote with 99.7% of the votes being cast in favor of the
Company’s executive compensation. The compensation committee viewed this vote as strong support for its
executive compensation decisions and policies and, accordingly, it did not consider making changes to its
executive compensation decisions and policies in response to this advisory shareholder vote.

Enterprise Risk and Compensation

The compensation committee considers all facets of the NEOs compensation structure and believes it
appropriately balances the drive for financial results and risks to the Company. The compensation committee
aligns executive compensation with shareholder interests by placing a majority of total compensation “at risk,”
and increasing the amount of pay that is “at risk” as the executives achieve higher levels of performance. “At
risk” means the executive will not realize value unless performance goals are attained. The short-term incentives
are tied to easily measureable financial metrics that the compensation committee believes are consistent,
transparent and drive shareholder value; that is, comparable store sales, product margin and diluted earnings per
share. The majority of the long-term based compensation vests over several years and is not tied to specific
financial metrics. By combining annual cash incentives tied to short-term financial performance along with the
majority of the NEOs long-term wealth creation tied to stock performance, the compensation committee believes
an appropriate balance exists between rewarding performance without excessive risk taking. In addition the
compensation committee believes the short-term incentives in place that are tied to financial performance do not
provide excessive risk to the Company as they are capped at no more than 180% of base pay for our CEO, 160%
for our President and GMM, 130% for our Chairman and Executive Vice President of Stores and 100% for our
current CFO. The compensation committee believes that the overall executive compensation policy contains less
than a ‘reasonable likelihood’ of material risk.

Employment Agreements

None of our U.S. employees have an employment agreement and all U.S. employees are “at will.”

Tax Implications

Section 162(m) of the Internal Revenue Code limits the Company’s ability to deduct certain compensation over

$1.0 million paid to the executive officers unless such compensation is based on performance objectives meeting
certain criteria or is otherwise excluded from the limitation. The compensation committee believes that it is generally
in the Company’s best interests to comply with Section 162(m) and expects that most of the compensation paid to the
named executives will either be under the $1.0 million limit, eligible for exclusion (such as stock options) under the
$1.0 million limit, or based on qualified performance objectives. However, notwithstanding this general policy, the
compensation committee also believes that there may be circumstances in which the Company’s interests are best
served by maintaining flexibility in the way compensation is provided, whether or not compensation is fully deductible
under Section 162(m). Accordingly, it is possible that some compensation paid to executive officers may not be
deductible to the extent that the aggregate of non-exempt compensation exceeds the $1.0 million level. At our 2012
Annual Meeting of Shareholders, the Company’s shareholders approved the material terms of the performance criteria

under the Executive Officer Non-Equity Incentive Plan and therefore, the short-term cash based incentive awards
(discussed earlier in the Compensation Discussion and Analysis) are eligible for exclusion under the Section 162(m)
$1.0 million limit for fiscal 2012 and beyond.

Advisory Vote on Executive Compensation

We provided the Company’s shareholders with the opportunity to vote to approve, on an advisory, non-

binding basis, the compensation of our named executive officers at our 2011 Annual Meeting of Shareholders.
As noted above under the section heading “The Compensation Decision-making Process,” the result of this
advisory shareholder vote was 99.7% of votes cast approved the compensation of our named executive officers.

Additionally, at our 2011 Annual Meeting of Shareholders, we provided the Company’s shareholders with

the opportunity to indicate their preference on how frequently we should seek an advisory vote on the
compensation of our named executive officers, with the option for every “1 Year,” every “2 Years,” or every
“3 Years.” The result of this advisory vote was 58.9% of votes cast were in favor of an advisory vote on
executive compensation every three years. Based on the board of directors’ recommendation for a frequency of
three years and the voting results with respect to the frequency of future advisory votes on executive
compensation, the board of directors determined that it will include in the annual shareholder meeting proxy
materials a shareholder vote on executive compensation every three years until the next required vote on
frequency of advisory votes on executive compensation. Therefore, the next advisory vote on executive
compensation will occur at the 2014 Annual Meeting of Shareholders.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

Messrs. Ryles, Weber and Barnum currently serve as members of the compensation committee. No member
of the compensation committee was at any time during fiscal 2012 or at any other time an officer or employee of
Zumiez, and no member had any relationship with Zumiez requiring disclosure as a related-person in the section
“Certain Relationships and Related Transactions.” No executive officer of Zumiez has served on the board of
directors or compensation committee of any other entity that has or has had one or more executive officers who
served as a member of our board of directors or compensation committee during fiscal 2012.

REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS

The compensation committee of the Company has reviewed and discussed the Compensation Discussion

and Analysis required by Item 402(b) of Regulation S-K with management and, based on such review and
discussion, the compensation committee recommended to the board of directors that the Compensation
Discussion and Analysis be included in this Proxy Statement.

THE COMPENSATION COMMITTEE

Gerald F. Ryles, Chairman
William M. Barnum
James M. Weber

The compensation committee report does not constitute soliciting material, and shall not be deemed to be filed or
incorporated by reference into any other filing under the Securities Act of 1933, or the Securities Exchange Act
of 1934, except to the extent that the Company specifically incorporates the compensation committee report by
reference therein.

Summary Compensation Table

The following table shows all compensation for fiscal 2012, 2011 and 2010 awarded to, earned by, or paid

to our CEO, our CFO and our other three most highly paid executive officers, as well as our former Chief
Financial Officer and Secretary. These executive officers are referred to as “NEOs.”

Stock
Awards
($) (1)

Option
Awards
($) (2)

Non-Equity
Incentive Plan
Compensation
($) (3)

All Other
Compensation
($) (4)

Name and Principal Position

Thomas D. Campion . . . . . . . . .

Chairman of the Board

Richard M. Brooks . . . . . . . . . .

Chief Executive Officer
and Director

Lynn K. Kilbourne . . . . . . . . . .

President and General
Merchandising Manager

Year

2012
2011
2010

Salary
($)

306,600
305,752
262,500

631,324
606,456
262,500

489,113
472,596
350,000

—
—
—

295,504
253,100
134,610

295,503
248,911
204,512

199,290
348,758
252,656

568,350
965,790
252,656

391,400
581,875
505,313

Christopher C. Work (5) . . . . . .

2012

158,265

63,532

224,997

54,501

Chief Financial Officer

Ford K. Wright . . . . . . . . . . . . .

Executive Vice
President of Stores

Marc D. Stolzman (6) . . . . . . . .

former Chief Financial
Officer and Secretary

2012
2011
2010

2012
2011

278,172
269,233
225,000

119,508
120,982
114,419

119,490
118,878
176,792

202,512
143,077

136,517
300,010

136,500
599,992

153,733
275,502
235,125

—
165,200

8,421
8,646
6,363

11,794
8,248
9,100

4,363
5,092
613

6,926

11,749
5,848
9,864

606
7,741

Total ($)

514,311
663,156
521,519

1,211,468
1,580,494
524,256

1,475,883
1,561,574
1,195,048

508,221

682,652
790,443
761,200

476,135
1,216,020

(1) This column represents the aggregate grant-date fair value of restricted stock awards calculated in

accordance with FASB ASC Topic 718, excluding the impact of estimated forfeitures related to service
based vesting conditions. For assumptions used in determining these values, please see Note 2 (listed under
Stock Compensation) in the Notes to Consolidated Financial Statements in our fiscal 2012, 2011 and 2010
Form 10-K. Information regarding the restricted stock awards granted to the NEOs during fiscal 2012 is set
forth in the Grants of Plan-Based Awards Table on a grant-by-grant basis.

(2) This column represents the aggregate grant-date fair value of stock option awards calculated in accordance
with FASB ASC Topic 718, excluding the impact of estimated forfeitures related to service based vesting
conditions. For assumptions used in determining these values, please see Note 2 (listed under Stock
Compensation) in the Notes to Consolidated Financial Statements in our fiscal 2012, 2011 and 2010
Form 10-K. Information regarding the stock option awards granted to our NEOs during 2012 is set forth in
the Grants of Plan-Based Awards Table on a grant-by-grant basis.

(3) The amounts set forth in this column were earned during fiscal 2012, 2011 and 2010 and paid in early

fiscal 2013, 2012 and 2011 respectively, to each of the NEOs under our executive Short-Term Cash Based
Incentives. For additional information on the determination of the amounts related to Non-Equity Incentive
Plan Compensation, see the previous discussion in the Compensation Discussion and Analysis entitled,
“Short-Term Cash Based Incentives.” Information regarding the threshold, target and maximum estimated
future payouts under non-equity incentive plan awards is set forth in the Grants of Plan-Based Awards
Table.

(4) All Other Compensation includes the amount of Company 401K employer match contributions, Company
paid short-term and long-term disability insurance premiums, Company paid life insurance premiums and
merchandise discounts, which are generally available to all qualified employees. For fiscal 2012, Company

401K employer match contributions were as follows: Mr. Campion ($7,699); Mr. Brooks ($7,699);
Ms. Kilbourne ($3,182); Mr. Work ($5,726) and Mr. Wright ($5,726). For fiscal 2012, the value of
merchandise discounts received were as follows: Mr. Campion ($305); Mr. Brooks ($3,679); Ms. Kilbourne
($764); Mr. Work ($791); Mr. Wright ($5,585) and Mr. Stolzman ($348).

(5) Mr. Work was appointed as the Company’s Chief Financial Officer effective August 23, 2012. His fiscal

2012 base salary upon his promotion was $210,000 on an annualized basis.

(6) Mr. Stolzman was our Chief Financial Officer and Secretary from August 2011 to August 2012. His

fiscal 2012 base salary was $319,250 on an annualized basis. As a result of his termination of employment,
Mr. Stolzman forfeited 44,466 in stock options with a grant date fair value of $586,491 and 15,193 in
unvested restricted stock with a grant date fair value of $362,184.

Grants of Plan-Based Awards

The following table provides information about equity and non-equity awards granted to the NEOs in fiscal
2012. In the columns described as Estimated Future Payouts Under Non-Equity Incentive Plan Awards, this table
quantifies potential awards under the executive short-term cash based incentives plan discussed previously.

Estimated Future Payouts Under
Non-Equity Incentive Plan Awards (1)

Grant Date

Threshold
($)

Target
($)

Maximum
($)

49,823

199,290

398,580

142,088

568,350

1,136,700

Name

Thomas D. Campion . . . . . . . .

Chairman of the Board

Richard M. Brooks . . . . . . . . .
Chief Executive Officer and
Director

All Other
Stock
Awards:
Number of
Shares of
Stock or
Units (#)
(2)

All Other
Option
Awards:
Number of
Securities
Underlying
Options (#)
(3)

Exercise or
Base Price
of Option
Awards ($)
(4)

Grant Date
Fair Value of
Stock and
Option
Awards ($)
(5)

Lynn K. Kilbourne . . . . . . . . .

97,850

391,400

782,800

President and General
Merchandising Manager

3/12/2012
3/12/2012

Christopher C. Work (6) . . . . .

Chief Financial Officer

3/16/2012
9/15/2012

11,533

46,132

92,264

Ford K. Wright

. . . . . . . . . . . .

45,216

180,863

361,725

Executive Vice
President of Stores

3/12/2012
3/12/2012

Marc D. Stolzman (7) . . . . . . .

51,838

207,350

414,700

former Chief Financial
Officer and Secretary

3/12/2012
3/12/2012

8,548

1,833

3,457

3,949

13,985

34.57

13,066

28.30

5,655

34.57

6,460

34.57

295,504
295,503

63,532
224,997

119,508
119,490

136,517
136,500

(1) These columns show what the potential payout for each NEO was under the executive short-term cash based
incentives for fiscal 2012 if the threshold, target or maximum goals were satisfied for all performance
measures. Please refer to the discussion in the Compensation Discussion and Analysis entitled, “Short-Term
Cash Based Incentives” and the Summary Compensation Table for amounts earned by the NEOs in fiscal 2012.

(2) This column shows the number of shares of restricted stock granted in fiscal 2012 to the NEOs. The restricted

stock awards for Ms. Kilbourne, Mr. Wright and Mr. Stolzman vest over a three-year period in equal annual
installments beginning on the first anniversary date of the grant. The restricted stock award for Mr. Work vests
over a four-year period in equal annual installments beginning on the first anniversary date of the grant. Please
refer to the discussion in the Compensation Discussion and Analysis entitled, “Long-Term Equity Incentives.”
Information on the aggregate grant-date fair value of restricted stock awards is set forth in the Summary
Compensation Table.

(3) This column shows the number of stock options granted in fiscal 2012 to the NEOs. These stock options vest

over a four-year period in equal annual installments beginning on the first anniversary date of the grant. Please
refer to the discussion in the Compensation Discussion and Analysis entitled, “Long-Term Equity Incentives.”
Information on the aggregate grant-date fair value of stock option awards is set forth in the Summary
Compensation Table.

(4) This column shows the exercise price for the stock options granted, which was the closing price of the

Company’s stock on the grant date indicated.

(5) This column represents the aggregate grant-date fair value of restricted stock and stock option awards

calculated in accordance with FASB ASC Topic 718, excluding the impact of estimated forfeitures related to

service based vesting conditions. For assumptions used in determining these values, please see Note 2
(listed under Stock Compensation) in the Notes to Consolidated Financial Statements in our fiscal 2012
Form 10-K. These amounts reflect the Company’s accounting expense for these stock option and restricted
stock awards to be recognized over the vesting period of the grants, and do not correspond to the actual
value that will be recognized by the NEO.

(6) Mr. Work was appointed as the Company’s Chief Financial Officer effective August 23, 2012 and received

a short-term cash based incentive compensation prorated based on the length of service in that position in
fiscal 2012. Mr. Work’s short-term cash based incentive compensation target on an annualized basis was
$105,000 and his short-term cash based incentive compensation maximum on an annualized basis was
$210,000.

(7) Mr. Stolzman forfeited 44,466 of stock options and 15,193 shares of unvested restricted stock upon his

resignation of the position of Chief Financial Officer and Secretary effective August 23, 2012.

Outstanding Equity Awards at Fiscal Year-End

The following table provides information on the holdings of stock option awards and restricted stock awards
for the NEOs at February 2, 2013. This table includes unexercised and unvested stock options and restricted stock
awards. The vesting schedule for each grant of stock options and restricted stock awards is shown in the footnotes to
this table. The market value of the restricted stock awards is based on the closing market price of our stock on
February 2, 2013, which was $21.11.

Option Awards

Stock Awards

Number of
Securities
Underlying
Unexercised
Options
Exercisable
(#)

Number of
Securities
Underlying
Unexercised
Options
Unexercisable
(#)

Options
Exercise
Price
($)

Option
Expiration
Date

—

8,971
40,000
40,000
40,000
41,250
8,300
4,073
—
—
—
—
834
—
—

30,000
31,500
40,000
41,250
7,176
1,945
—
—
—
—

—

— (1)
— (2)
— (3)
— (4)
13,750(5)
8,300(6)
12,217(7)
13,985(8)
—
—
—
831(12)

9/9/2014
3.87
27.31
3/9/2016
35.85 3/13/2017
14.00 3/12/2018
6.88 3/16/2019
19.23 3/15/2020
25.31 3/14/2021
34.57 3/12/2022
—
—
—
—
—
—
8.64 7/21/2019
13,066(13) 28.30 9/15/2022
—
—

—

10,000(18) 27.31

— (3)
— (4)
13,750(5)
7,174(6)
5,835(7)
5,655(8)
—
—
—

3/9/2016
35.85 3/13/2017
14.00 3/12/2018
6.88 3/16/2019
19.23 3/15/2020
25.31 3/14/2021
34.57 3/12/2022
—
—
—

—
—
—

Number of
Shares or
Units of
Stock That
Have Not
Vested
(#)

—

Market
Value of
Shares or
Units of
Stock that
Have Not
Vested
($)

—

—
—

—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
2,332(9)
49,229
6,666(10) 140,719
8,548(11) 180,448
—
—
1,575(14) 33,248
1,294(15) 27,316
1,875(16) 39,581
1,833(17) 38,695
—
—
—
—
—
—
—
—
—
—
—
—
41,840
1,982(9)
3,186(10) 67,256
3,457(11) 72,977

—

Name

Thomas D. Campion . . . . . . . . . . . . . . . .

Chairman of the Board

Richard M. Brooks . . . . . . . . . . . . . . . . .
Chief Executive Officer and Director

Lynn K. Kilbourne . . . . . . . . . . . . . . . . . .

President and General
Merchandising Manager

Christopher C. Work . . . . . . . . . . . . . . . .

Chief Financial Officer

Ford K. Wright

. . . . . . . . . . . . . . . . . . . .

Executive Vice
President of Stores

Marc D. Stolzman (19) . . . . . . . . . . . . . .
former Chief Financial Officer and
Secretary

(1) Options subject to this grant vest twenty percent on July 31, 2005 and 1/48th of the remaining options vest each

month thereafter. The grant date was September 9, 2004.

(2) Options subject to this grant vest twenty percent on the one-year anniversary of the grant date and 1/48th of the

remaining options vest each month thereafter. The grant date was March 9, 2006.

(3) Options subject to this grant vest over a five-year period in equal annual installments beginning on the one-

year anniversary of the grant date. The grant date was March 13, 2007.

(4) Options subject to this grant vest over a four-year period in equal annual installments beginning on the one-

year anniversary of the grant date. The grant date was March 12, 2008.

(5) Options subject to this grant vest over a four-year period in equal annual installments beginning on the one-

year anniversary of the grant date. The grant date was March 16, 2009.

(6) Options subject to this grant vest over a four-year period in equal annual installments beginning on

March 15, 2011. The grant date was June 3, 2010.

(7) Options subject to this grant vest over a four-year period in equal annual installments beginning on the one-

year anniversary of the grant date. The grant date was March 14, 2011.

(8) Options subject to this grant vest over a four-year period in equal annual installments beginning on the one-

year anniversary of the grant date. The grant date was March 12, 2012.

(9) This restricted stock grant vest over a three-year period in equal annual installments beginning on the grant

date anniversary. The grant date was March 15, 2010.

(10) This restricted stock grant vest over a three-year period in equal annual installments beginning on the grant

date anniversary. The grant date was March 14, 2011.

(11) This restricted stock grant vest over a three-year period in equal annual installments beginning on the grant

date anniversary. The grant date was March 12, 2012.

(12) Options subject to this grant vest over a four-year period in equal annual installments beginning on the one-

year anniversary of the grant date. The grant date was July 21, 2009.

(13) Options subject to this grant vest over a four-year period in equal annual installments beginning on the one-

year anniversary of the grant date. The grant date was September 15, 2012.

(14) This restricted stock grant vest over a four-year period in equal annual installments beginning on the grant

date anniversary. The grant date was March 16, 2009.

(15) This restricted stock grant vest over a four-year period in equal annual installments beginning on the grant

date anniversary. The grant date was March 15, 2010.

(16) This restricted stock grant vest over a four-year period in equal annual installments beginning on the grant

date anniversary. The grant date was March 14, 2011.

(17) This restricted stock grant vest over a four-year period in equal annual installments beginning on the grant

date anniversary. The grant date was March 16, 2012.

(18) Options subject to this grant vest over an eight-year period in equal annual installments beginning on the

grant date anniversary. The grant date was March 9, 2006.

(19) Mr. Stolzman forfeited 44,466 of stock options and 15,193 of unvested restricted stock upon his resignation

of the position of Chief Financial Officer and Secretary effective August 23, 2012.

Option Exercises and Stock Vested

The following table provides information for the NEOs on stock option exercises and on the vesting of other

stock awards during fiscal 2012, including the number of shares acquired upon exercise or vesting and the value
released before payment of any applicable withholding taxes and broker commissions.

Name

Thomas D. Campion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Chairman of the Board

Richard M. Brooks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Chief Executive Officer and Director

Lynn K. Kilbourne . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

President and General
Merchandising Manager

Christopher C. Work . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Chief Financial Officer

Ford K. Wright

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Executive Vice
President of Stores

Option Awards

Stock Awards

Number of
Shares
Acquired on
Exercise
(#)

Valued
Realized on
Exercise (1)
($)

Number of
Shares
Acquired
on Vesting
(#)

Value
Realized on
Vesting (2)
($)

—

19,338

631,220

3,848

134,590

7,410

260,559

Marc D. Stolzman . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

12,669

10,353

3,749

128,666

former Chief Financial Officer and Secretary

(1) The dollar amount realized upon exercise was calculated by determining the difference between the market
price of the underlying shares of common stock at exercise and the exercise price of the stock options.

(2) The dollar amount realized upon vesting was calculated by applying the market price of the restricted stock

shares on the vesting dates.

Pension Benefits

The Company does not maintain a defined benefit pension plan or supplemental pension plan.

Nonqualified Deferred Compensation

The Company does not maintain a nonqualified deferred compensation plan.

Potential Payments Upon Termination or Change in Control

Certain of the NEOs have unvested stock options and awards of restricted stock under the Company’s 2005

Equity Incentive Plan, the vesting of which may accelerate in the event of a Change in Control (as defined
below). The information below is a summary of certain provisions of these agreements and does not attempt to
describe all aspects of the agreements. The rights of the parties are governed by the actual agreements and are in
no way modified by the abbreviated summaries set forth in this proxy statement.

Acceleration of Stock Award Vesting

The Company’s 2005 Equity Incentive Plan provides that in the event of a Change in Control (as defined
below), if the surviving corporation does not assume or continue outstanding stock awards or substitute similar

stock awards for those outstanding under the 2005 Equity Incentive Plan, then all such outstanding stock awards
will be accelerated and become fully vested and exercisable immediately prior to the consummation of the
Change in Control transaction.

For purposes of the 2005 Equity Incentive Plan, “Change in Control” means:

(i)

the consummation of a merger or consolidation of the Company with or into another entity or any other
corporate reorganization, if more than 50% of the combined voting power of the continuing or surviving
entity’s securities outstanding immediately after such merger, consolidation or other reorganization is
owned by persons who were not shareholders of the Company immediately prior to such merger,
consolidation or other reorganization; or

(ii)

the sale, transfer or other disposition of all or substantially all of the Company’s assets.

A transaction shall not constitute a Change in Control if its sole purpose is to change the state of the

Company’s incorporation or to create a holding company that will be owned in substantially the same
proportions by the persons who held the Company’s securities immediately before such transaction.

The following table shows the potential payments the NEOs could have received under these arrangements

in connection with a Change in Control on February 2, 2013.

Executive Officer

Stock Option Vesting
in Connection with a
Change in Control (1)

Restricted Stock
Vesting in Connection
with a Change in
Control (2)

Thomas D. Campion, Chairman of the Board . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . .
Richard M. Brooks, Chief Executive Officer and Director
Lynn K. Kilbourne, President and General Merchandising Manager . . . . .
Christopher C. Work, Chief Financial Officer . . . . . . . . . . . . . . . . . . . . . .
Ford K. Wright, Executive Vice President of Stores . . . . . . . . . . . . . . . . .
Marc D. Stolzman, former Chief Financial Officer and Secretary (3) . . . .

$ —
$ —
$211,267
$ 10,363
$482,658
$ —

$ —
$ —
$778,621
$138,840
$265,522
$ —

(1) Represents the amount calculated by multiplying the number of in-the-money options with respect to which
the vesting would accelerate as a result of a Change in Control under the circumstances noted by the
difference between the exercise price and the closing price of a share of common stock on the last trading
day of fiscal 2012. The number of shares subject to unvested stock options and exercise prices thereof are
shown previously in the Outstanding Equity Awards at Fiscal Year-End table.

(2) Represents the amount of unvested restricted stocks awarded with respect to which the vesting would

accelerate as a result of a Change in Control noted by the number of restricted stock shares unvested at the
closing price of a share of common stock on the last trading day of fiscal 2012.

(3) Mr. Stolzman, our former Chief Financial Officer and Secretary, resigned on August 23, 2012.

EQUITY COMPENSATION PLAN INFORMATION

The following table sets forth information concerning the Company’s equity compensation plans at

February 2, 2013:

Plan Category

Number of
securities to be
issued upon
exercise of
outstanding
options, warrants
and rights

Weighted-
average exercise
price of
outstanding
options, warrants
and rights

Equity compensation plans approved by security holders (1) . . . . . .
Equity compensation plans not approved by security holders (2) . . .
Employee stock purchase plans approved by security holders (3) . .

820,146
—
—

$17.62
—
—

Number of
securities
remaining
available for
future issuance
under equity
compensation
plans

5,732,910
—

811,434

(1) Equity compensation plans approved by shareholders include the 1993 Stock Option Plan, the 2004 Stock

Option Plan and the 2005 Equity Incentive Plan.

(2) The Company does not have any equity compensation plans that were not approved by the Company’s

shareholders.

(3) Employee stock purchase plans approved by shareholders include the 2005 Employee Stock Purchase Plan.

REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS

The fiscal 2012 audit committee operates under a written charter adopted by the Company’s board of

directors. The charter of the audit committee is available at http://ir.zumiez.com.

We have reviewed and discussed with management our consolidated financial statements as of and for the

fiscal year ended February 2, 2013.

We have discussed with the independent public accountants the matters required to be discussed by

Statement on Auditing Standards No. 61, as amended (AICPA, Professional Standards, Vol. 1. AU Section 380),
as adopted by the Public Company Accounting Oversight Board in Rule 3200T.

We have received and reviewed the written disclosures and the letter from the independent public

accountants required by applicable requirements of the Public Company Accounting Oversight Board regarding
the independent accountant’s communications with the audit committee concerning independence, and have
discussed with the independent accountants their independence.

Based on the reviews and discussions referred to previously, we recommended to our board of directors that

the financial statements referred to previously be included in our Annual Report on Form 10-K.

THE AUDIT COMMITTEE

Ernest R. Johnson, Chairman
Sarah (Sally) G. McCoy
Gerald F. Ryles
Travis D. Smith

The audit committee report does not constitute soliciting material, and shall not be deemed to be filed or
incorporated by reference into any other filing under the Securities Act of 1933, or the Securities Exchange Act
of 1934, except to the extent that the Company specifically incorporates the audit committee report by reference
therein.

Fees Paid to Independent Registered Public Accounting Firm for Fiscal 2012 and 2011

The aggregate fees billed by Moss Adams LLP for professional services rendered for fiscal 2012 and

fiscal 2011, respectively, are as follows:

Audit fees (1)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Audit-related fees (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax fees (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$448,000
15,000
82,000

$394,000
15,000
94,000

Total fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$545,000

$503,000

Fiscal 2012

Fiscal 2011

(1) Audit fees include services and costs in connection with the audit of the consolidated annual financial

statements of the Company and reviews of the interim condensed consolidated financial statements included
in the Company’s quarterly reports.

(2) Audit-related fees include services and costs in connection with the audit of the Company’s 401K plan.

(3) Tax fees include services and costs in connection with federal, state and foreign tax compliance and tax

advice.

Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent
Registered Public Accounting Firm

The audit committee pre-approves all auditing services, internal control-related services and permitted non-
audit services (including the fees and terms thereof) to be performed for the Company by its independent auditor,
subject to the “de minimis exception” (discussed below) for non-audit services that are approved by the audit
committee prior to the completion of the audit. The audit committee may form and delegate authority to
subcommittees consisting of one or more members when appropriate, including the authority to grant pre-
approvals of audit and permitted non-audit services, provided that decisions of such subcommittee to grant pre-
approvals shall be presented to the full audit committee at its next scheduled meeting. The audit committee will
evaluate whether any permitted non-audit services are compatible with maintaining the auditor’s independence.

As discussed previously, all services of the auditor must be pre-approved by the audit committee except for

certain services other than audit, review or attest services that meet the “de minimis exception” under 17 CFR
Section 210.2-01, namely:

•

the aggregate amount of fees paid for all such services is not more than 5% of the total fees paid by the
Company to its auditor during the fiscal year in which the services are provided;

such services were not recognized by the Company at the time of the engagement to be non-audit
services; and

such services are promptly brought to the attention of the audit committee and approved prior to the
completion of the audit.

During fiscal 2012 and 2011, there were no services that were performed pursuant to the “de minimis

exception.”

RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

PROPOSAL 2

Upon the recommendation of the audit committee, the board of directors has reappointed Moss Adams LLP

to audit our consolidated financial statements for the fiscal year ending February 1, 2014 (“fiscal 2013”). Moss
Adams LLP has served as our independent registered public accounting firm since fiscal 2006. A representative
from Moss Adams LLP will be at the meeting to answer any questions that may arise.

If the shareholders do not ratify the selection of Moss Adams LLP as our independent registered public

accounting firm for fiscal 2013, our board of directors will evaluate what would be in the best interests of our
Company and our shareholders and consider whether to select a new independent registered public accounting
firm for the current fiscal year or whether to wait until the completion of the audit for the current fiscal year
before changing our independent registered public accounting firm.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF ITS SELECTION OF MOSS
ADAMS LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR FISCAL
2013

HOUSEHOLDING OF PROXY MATERIALS

The SEC has adopted rules that permit companies and intermediaries (e.g., brokers, banks and other agents)

to satisfy the delivery requirements for proxy statements and annual reports with respect to two or more
shareholders sharing the same address by delivering a single proxy statement addressed to those shareholders.
This process, which is commonly referred to as “householding,” potentially means extra convenience for
shareholders and cost savings for companies.

A number of brokers, banks or other agents with account holders who are shareholders of Zumiez will be

“householding” our proxy materials. A single proxy statement will be delivered to multiple shareholders sharing
an address unless contrary instructions have been received from the affected shareholders. Once you have
received notice from your broker, bank or other agent that it will be “householding” communications to your
address, “householding” will continue until you are notified otherwise or until you revoke your consent. If, at any
time, you no longer wish to participate in “householding” and would prefer to receive a separate proxy statement
and annual report, please notify your broker, bank or other agent, and direct a written request for the separate
proxy statement and annual report to Corporate Secretary, Zumiez Inc., 4001 204th Street SW, Lynnwood,
Washington 98036. Shareholders whose shares are held by their broker, bank or other agent as nominee and who
currently receive multiple copies of the proxy statement at their address that would like to request
“householding” of their communications should contact their broker, bank or other agent.

PROPOSALS OF SHAREHOLDERS

We expect to hold our next annual meeting on or about May 21, 2014. If you wish to submit a proposal for

inclusion in the proxy materials for that meeting, you must send the proposal to our Corporate Secretary at the
address below. The proposal must be received at our executive offices no later than December 12, 2013, to be
considered for inclusion. Among other requirements set forth in the SEC’s proxy rules and our bylaws, you must
have continuously held at least $2,000 in market value or 1% of our outstanding stock for at least one year by the
date of submitting the proposal, and you must continue to own such stock through the date of the meeting.

If you intend to nominate candidates for election as directors or present a proposal at the meeting without
including it in our proxy materials, you must provide notice of such proposal to us no later than January 22, 2014,
and not before December 23, 2013. Our bylaws outline procedures for giving the required notice. If you would
like a copy of the procedures contained in our bylaws, please contact:

Corporate Secretary
Zumiez Inc.
4001 204th Street SW
Lynnwood, Washington 98036

OTHER MATTERS

Our board of directors knows of no other matters that will be presented for consideration at the annual
meeting. If any other matters are properly brought before the meeting, it is the intention of the persons named in
the accompanying proxy to vote on such matters in accordance with their best judgment.

By Order of the Board of Directors

Chris K. Visser
General Counsel and Corporate Secretary

Lynnwood, Washington
April 11, 2013

A copy of our Annual Report on Form 10-K for the fiscal year ended February 2, 2013 filed with the

SEC is available without charge upon written request to: Corporate Secretary, Zumiez Inc., 4001 204th
Street SW, Lynnwood, Washington 98036.

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

È ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE

ACT OF 1934

‘ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the fiscal year ended: February 2, 2013

Commission File Number: 000-51300

ZUMIEZ INC.

(Exact name of Registrant as specified in its charter)

Washington
(State or other jurisdiction of
incorporation or organization)

4001 204th Street SW
Lynnwood, Washington
(Address of principal executive offices)

91-1040022
(IRS Employer
Identification No.)

98036
(Zip Code)

(425) 551-1500
(Registrant’s telephone number, including area code)

Securities registered under Section 12(b) of the Act: Common Stock

Name of each exchange on which registered: The Nasdaq Global Select Market

Securities registered under Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ‘ No È
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the

Act. Yes ‘ No È

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and
(2) has been subject to such filing requirements for the last 90 days. Yes È No ‘

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive

Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding
12 months (or for such shorter period that the Registrant was required to submit and post such files). Yes È No ‘

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not
contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated
by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ‘

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the
Exchange Act.
Large accelerated filer È
Non-accelerated filer ‘

Accelerated filer
Smaller reporting company ‘

‘

Indicate by check mark if the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ‘ No È
The aggregate market value of the voting and non-voting stock held by non-affiliates of the registrant as of the last business day of the

second fiscal quarter, July 27, 2012, was $851,643,956.

At March 8, 2013, there were 29,989,450 shares outstanding of common stock.

The information required by Part III of this report is incorporated by reference from the Registrant’s definitive proxy statement, relating

to the Annual Meeting of Shareholders scheduled to be held May 22, 2013, which definitive proxy statement will be filed not later than
120 days after the end of the fiscal year to which this report relates.

DOCUMENTS INCORPORATED BY REFERENCE

ZUMIEZ INC.
FORM 10-K
TABLE OF CONTENTS

PART I

Item 1.
Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 1A. Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 1B. Unresolved Staff Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 2.
Item 3.
Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 4. Mine Safety Disclosures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

PART II

Item 5. Market for the Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases

of Equity Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 6.
Selected Financial Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations . . . . . .
Item 7A. Quantitative and Qualitative Disclosures About Market Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Financial Statements and Supplementary Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 8.
Item 9.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure . . . . . .
Item 9A. Controls and Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 9B. Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

PART III

Item 10. Directors, Executive Officers and Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 11. Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Shareholder

Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 13. Certain Relationships and Related Transactions and Director Independence . . . . . . . . . . . . . . . . .
Principal Accountant Fees and Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 14.

PART IV

3
10
21
21
22
22

23
26
27
41
41
41
42
42

43
43

43
43
43

Item 15. Exhibits and Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

44
45

ZUMIEZ INC.
FORM 10-K
PART I.

This Form 10-K contains forward-looking statements. These statements relate to our expectations for future

events and future financial performance. Generally, the words “anticipates,” “expects,” “intends,” “may,”
“should,” “plans,” “believes,” “predicts,” “potential,” “continue” and similar expressions identify forward-
looking statements. Forward-looking statements involve risks and uncertainties, and future events and
circumstances could differ significantly from those anticipated in the forward-looking statements. These
statements are only predictions. Actual events or results may differ materially. Factors which could affect our
financial results are described in Item 1A below and in Item 7 of Part II of this Form 10-K. Readers are cautioned
not to place undue reliance on these forward-looking statements, which speak only as of the date hereof.
Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot
guarantee future results, levels of activity, performance or achievements. Moreover, neither we nor any other
person assume responsibility for the accuracy and completeness of the forward-looking statements. We undertake
no duty to update any of the forward-looking statements after the date of this report to conform such statements
to actual results or to changes in our expectations.

We use a fiscal calendar widely used by the retail industry that results in a fiscal year consisting of a 52- or
53-week period ending on the Saturday closest to January 31. Each fiscal year consists of four 13-week quarters,
with an extra week added to the fourth quarter every five or six years. Fiscal 2013 will be the 52-week period
ending February 1, 2014. Fiscal 2012 was the 53-week period ending February 2, 2013. Fiscal 2011 was the
52-week period ending January 28, 2012. Fiscal 2010 was the 52-week period ending January 29, 2011.

“Zumiez,” the “Company,” “we,” “us,” “its,” “our” and similar references refer to Zumiez Inc. and its

wholly-owned subsidiaries.

Item 1.

BUSINESS

Zumiez Inc. is a leading multi-channel specialty retailer of action sports related apparel, footwear,

accessories and hardgoods, focusing on skateboarding, snowboarding, surfing, motocross and bicycle motocross
(“BMX”) for young men and women. The Company was formed in August 1978 and is a Washington State
corporation.

At February 2, 2013, we operated 500 stores; 472 in the United States (“U.S.”), 20 in Canada and eight in

Europe. We operate under the names Zumiez and Blue Tomato. Additionally, we operate ecommerce websites at
www.zumiez.com and www.blue-tomato.com.

We completed the acquisition of Snowboard Dachstein Tauern GmbH and Blue Tomato Graz Handel
GmbH (collectively, “Blue Tomato”) during the second quarter of fiscal 2012. Blue Tomato is a multi-channel
retailer for board sports and related apparel and footwear that operates primarily in the European marketplace.

Our stores bring the look and feel of an independent specialty shop by emphasizing the action sports

lifestyle through a distinctive store environment and high-energy sales personnel. We seek to staff our stores with
store associates who are knowledgeable users of our products, which we believe provides our customers with
enhanced customer service and supplements our ability to identify and react quickly to emerging trends and
fashions. We design our stores to appeal to teenagers and young adults and to serve as a destination for our
customers. We believe that our distinctive store concepts and compelling store economics will provide continued
opportunities for growth in both new and existing markets.

We believe that our customers desire authentic merchandise and fashion that is rooted in the action sports

lifestyle and reflects their individuality. We strive to keep our merchandising mix fresh by continuously

introducing new brands, styles and categories of product. Our focus on a diverse collection of brands allows us to
quickly adjust to changing fashion trends. We believe that our strategic mix of apparel, footwear, accessories and
hardgoods, including skateboards, snowboards, bindings, components and other equipment, allows us to
strengthen the potential of the brands we sell and helps to affirm our credibility with our customers. In addition,
we supplement our stores with a select offering of private label apparel and products as a value proposition that
we believe complements our overall merchandise selection.

Over our 34-year history, we have developed a corporate culture based on a passion for the action sports
lifestyle. Our management philosophy emphasizes an integrated combination of results measurement, training
and incentive programs, all designed to drive sales productivity at the individual store associate level. We have:

•

increased our store count from 285 as of the end of fiscal 2007 to 500 as of the end of fiscal 2012,
representing a compound annual growth rate of 11.9%;

increased net sales from $381.4 million in fiscal 2007 to $669.4 million in fiscal 2012, representing a
compound annual growth rate of 11.9%;

been profitable in every fiscal year of our 34-year history.

Competitive Strengths

We believe that the following competitive strengths differentiate us from our competitors and are critical to

our continuing success.

Attractive Lifestyle Retailing Concept. We target a large population of young men and women, many of
whom we believe are attracted to the action sports lifestyle and desire to promote their personal independence
and style through the apparel, footwear and accessories they wear and the equipment they use. We believe that
action sports is a permanent aspect of youth culture, reaching not only consumers that actually participate in
action sports, but also those who seek brands and styles that fit a desired action sports image. We believe we
have developed a brand image that our customers view as consistent with their attitudes, fashion tastes and
identity that should allow us to benefit in our market.

Differentiated Merchandising Strategy. We have created a highly differentiated retailing concept by offering

an extensive selection of current and relevant action sports brands encompassing apparel, footwear, accessories
and hardgoods. The breadth of merchandise offered at our stores exceeds that offered by many other action sports
specialty stores and includes some brands and products that are available within many malls or shopping areas
only at our stores. The action sports lifestyle includes activities that are popular at different times throughout the
year, providing us the opportunity to shift our merchandise selection seasonally. Many of our customers desire to
update their wardrobes and equipment as fashion trends evolve or the action sports season dictates. We believe
that our ability to quickly recognize changing brand and style preferences and transition our merchandise
offerings allows us to continually provide a compelling offering to our customers.

Deep-rooted Culture. Our culture and brand image enable us to successfully attract and retain high quality

employees who are passionate and knowledgeable about the products we sell. We place great emphasis on
customer service and satisfaction, and we have made this a defining feature of our corporate culture. To preserve
our culture, we strive to promote from within and we provide our employees with the knowledge and tools to
succeed through our comprehensive training programs and the flexibility to manage their stores to meet localized
customer demand.

Distinctive Store Experience. We strive to provide a convenient shopping environment that is appealing and

clearly communicates our distinct brand image. We seek to attract knowledgeable store associates who identify
with the action sports lifestyle and are able to offer superior customer service, advice and product expertise. We
believe that our distinctive store environment enhances our image as a leading source for apparel and equipment
for the action sports lifestyle.

Disciplined Operating Philosophy. We have an experienced senior management team. Our management
team has built a strong operating foundation based on sound retail principles that underlie our unique culture. Our
philosophy emphasizes an integrated combination of results measurement, training and incentive programs, all
designed to drive sales productivity to the individual store associate level. Our comprehensive training programs
are designed to provide our employees with enhanced product knowledge, selling skills and operational
expertise. We believe that our merchandising teams’ immersion in the action sports lifestyle, supplemented with
feedback from our customers, store associates and store leadership, allows us to consistently identify and react to
emerging fashion trends. We believe that this, combined with our inventory planning and allocation processes
and systems, helps us better manage markdown and fashion risk.

High-Impact, Integrated Marketing Approach. We seek to build relationships with our customers through a
multi-faceted marketing approach that is designed to integrate our brand images with the action sports lifestyle.
Our marketing efforts focus on reaching our customers in their environment and feature extensive grassroots
marketing events. Our marketing efforts also incorporate local sporting and music event promotions, advertising
in magazines popular with our target market, interactive contest sponsorships that actively involve our customers
with our brands and products and various social network channels. Events and activities such as these provide
opportunities for our customers to develop a strong identity with our culture and brands. We believe that our
immersion in the action sports lifestyle allows us to build credibility with our customers and gather valuable
feedback on evolving customer preferences.

Growth Strategy

We intend to expand our presence as a leading action sports lifestyle retailer by:

Opening New Store Locations. We believe that the action sports lifestyle has appeal that provides store

expansion opportunities throughout the U.S. and internationally. During the last three fiscal years ending with
fiscal 2012, we have opened or acquired 133 new stores consisting of 61 stores in fiscal 2012, 45 stores in fiscal
2011 and 27 stores in fiscal 2010. We have successfully opened stores in diverse markets throughout the U.S. and
internationally, which we believe demonstrates the portability and growth potential of our concepts. To take
advantage of what we believe to be a compelling economic store model, we plan to open approximately 60 new
stores in fiscal 2013, including stores in our existing markets and in new markets domestically and
internationally. The number of anticipated store openings may increase or decrease due to market conditions and
other factors.

Continuing to Generate Sales Growth through Improved Store Level Productivity and Continued

Ecommerce Sales Growth. We seek to maximize our comparable store sales, including sales from our ecommerce
businesses, and net sales per square foot by maintaining consistent store-level execution and offering our
customers a broad and relevant selection of action sports brands and products. We seek to continue to grow our
ecommerce sales with a continued focus on enhancing and integrating the unique Zumiez and Blue Tomato brand
experiences through this channel. In fiscal 2012, 2011 and 2010, ecommerce sales represented 11.2%, 7.3% and
4.7% of our total net sales.

Enhancing our Brand Awareness through Continued Marketing and Promotion. We believe that a key
component of our success is the brand exposure that we receive from our marketing events, promotions and
activities that embody the action sports lifestyle. These are designed to assist us in increasing brand awareness in
our existing markets and expanding into new markets by strengthening our connection with our target customer
base. We believe that our marketing efforts have also been successful in generating and promoting interest in our
product offerings. In addition, we use our ecommerce presence, designed to convey our passion for the action
sports lifestyle, to increase our brand awareness. We plan to continue to expand our integrated marketing efforts
by promoting more events and activities in our existing and new markets. We also benefit from branded vendors’
marketing.

Merchandising and Purchasing

Our goal is to be viewed by our customers as the definitive source of merchandise for the action sports
lifestyle. We believe that the breadth of merchandise offered at our stores, which includes apparel, footwear,
accessories and hardgoods, exceeds that offered by many other action sports specialty stores at a single location,
and makes our stores a single-stop purchase destination for our target customers.

We seek to identify action sports oriented fashion trends as they develop and to respond in a timely manner

with a relevant in-store product assortment. We strive to keep our merchandising mix fresh by continuously
introducing new brands or styles in response to the evolving desires of our customers. We also take advantage of
the change in action sports seasons during the year to maintain an updated product selection. Our merchandise
mix may vary by region and country, reflecting the specific action sports preferences and seasons in each market.

We believe that offering an extensive selection of current and relevant brands used and sometimes
developed by professional action sports athletes is integral to our overall success. No single brand, including
private label, accounted for more than 9.0%, 6.3% and 6.5% of our net sales in fiscal 2012, 2011 and 2010. We
believe that our strategic mix of both apparel, footwear, accessories and hardgoods allows us to strengthen the
potential of the brands we sell and affirms our credibility with our customers.

We believe that our ability to maintain an image consistent with the action sports lifestyle is important to
our key vendors. Given our scale and market position, we believe that many of our key vendors view us as an
important retail partner. This position helps ensure our ability to procure a relevant product assortment and
quickly respond to the changing fashion interests of our customers. Additionally, we believe we are presented
with a greater variety of products and styles by some of our vendors, as well as certain specially designed items
that are exclusively distributed to our stores. We supplement our merchandise assortment with a select offering
of private label products across many of our product categories. Our private label products complement the
branded products we sell, and some of our private label brands allow us to cater to the more value-oriented
customer. For fiscal 2012, 2011 and 2010 our private label merchandise represented 16.9%, 17.7% and 18.0% of
our net sales.

Our purchasing approach focuses on quality, speed and cost in order to provide timely delivery of

merchandise to our stores. We have developed a disciplined approach to buying and a dynamic inventory
planning and allocation process to support our merchandise strategy. We utilize a broad vendor base that allows
us to shift our merchandise purchases as required to react quickly to changing consumer demands and market
conditions. We manage the purchasing and allocation process by reviewing branded merchandise lines from new
and existing vendors, identifying emerging fashion trends and selecting branded merchandise styles in quantities,
colors and sizes to meet inventory levels established by management. We also coordinate inventory levels in
connection with individual store sales strength, our promotions and seasonality.

Our merchandising staff remains in tune with the action sports culture by participating in action sports,

attending relevant events and concerts, watching action sports related programming and reading action sports
publications. In order to identify evolving trends and fashion preferences, our staff spends considerable time
analyzing sales data, gathering feedback from our stores and customers, shopping in key markets and soliciting
input from our vendors.

We source our private label merchandise from foreign manufacturers around the world. We have cultivated
our private label sources with a view towards high quality merchandise, production reliability and consistency of
fit. We believe that our knowledge of fabric and production costs combined with a flexible sourcing base enables
us to source high-quality private label goods at favorable costs.

Stores

Store Locations. At February 2, 2013, we operated 500 stores in the following locations.

United States - 472 Stores

Alaska
Arizona
California
Colorado
Connecticut
Delaware
Florida
Georgia
Hawaii
Idaho

Illinois
Indiana
Iowa

3
13
80
18 Kansas
8 Maine
3 Maryland

19 Massachusetts
4 Michigan
3 Minnesota
6 Missouri

17 Montana
10 New Hampshire

3 New Jersey
3 Nevada
3 New Mexico
10 New York
8 North Carolina
8 Ohio

11 Oklahoma
5 Oregon

4 Pennsylvania
6 Rhode Island
18 South Dakota
9 Tennessee
5 Texas
32 Utah
7 Virginia
2 Washington
6 Wisconsin
13 Wyoming

18
1
2
4
47
14
9
24
14
2

Canada - 20 Stores

Alberta
British Columbia
Ontario

Europe - 8 Stores

Austria
Germany

3
6
11

5
3

The following table shows the number of stores (excluding temporary stores that we operate from time to

time for special events) opened, acquired and closed in each of our last three fiscal years:

Fiscal Year

2012
2011
2010

Stores
Opened

Stores
Acquired

Stores
Closed

Total Number of
Stores End of Year

53
45
27

8
0
0

5
1
4

500
444
400

Store Design and Environment. We design our stores to create a distinctive and engaging shopping

environment that we believe resonates with our customers. Our stores feature an industrial look, dense
merchandise displays, action sports focused posters and signage and popular music, all of which are consistent
with the look and feel of an independent action sports specialty shop. Our stores are designed to encourage our
customers to shop for longer periods of time, to interact with each other and our store associates and to visit our
stores more frequently. Our stores are constructed and finished to allow us to efficiently shift merchandise
displays throughout the year as the action sports season dictates. We believe that our store atmosphere enhances
our image as a leading provider of action sports lifestyle merchandise.

At February 2, 2013, our stores averaged approximately 3,000 square feet. All references in this Annual

Report on Form 10-K to square footage of our stores refers to gross square footage, including retail selling,
storage and back-office space. In fiscal 2013, we plan on opening new stores with square footage similar to this
average.

Expansion Opportunities and Site Selection. In selecting a location for a new store, we target high-traffic

locations with suitable demographics and favorable lease terms. For mall locations, we seek locations near busy
areas of the mall such as food courts, movie theaters, game stores and other popular teen retailers. We generally

locate our stores in malls in which other teen-oriented retailers have performed well. We also focus on evaluating
the market and mall-specific competitive environment for potential new store locations. We seek to diversify our
store locations regionally and by caliber of mall.

Store Management, Operations and Training. We believe that our success is dependent in part on our ability

to attract, train, retain and motivate qualified employees at all levels of our organization. We have developed a
corporate culture that we believe empowers the individual store managers to make store-level business decisions
and consistently rewards their success. We are committed to improving the skills and careers of our workforce
and providing advancement opportunities for employees.

We believe we provide our managers with the knowledge and tools to succeed through our comprehensive
training programs and the flexibility to manage their stores to meet customer demands. While general guidelines
for our merchandise assortments, store layouts and in-store visuals are provided by our home offices, we give our
managers substantial discretion to tailor their stores to the individual market and empower them to make store-
level business decisions. We design group training programs for our managers to improve both operational
expertise and supervisory skills.

Our store associates generally have an interest in the action sports lifestyle and are knowledgeable about our

products. Through our training, evaluation and incentive programs, we seek to enhance the productivity of our
store associates. These programs are designed to promote a competitive, yet fun, culture that is consistent with
the action sports lifestyle we seek to promote.

Marketing and Advertising

We seek to reach our target customer audience through a multi-faceted marketing approach that is designed

to integrate our brand image with the action sports lifestyle. Our marketing efforts focus on reaching our
customers in their environment, and feature extensive grassroots marketing events, which give our customers an
opportunity to experience and participate in the action sports lifestyle. Our grassroots marketing events are built
around the demographics of our customer base and offer an opportunity for our customers to develop a strong
identity with our brands and culture. For example, the Zumiez Couch Tour is a series of entertainment events that
includes skateboarding demonstrations from top professionals, autograph sessions, competitions and live music,
and has featured some of today’s most popular personalities in action sports and music. The Zumiez Couch Tour
provides a high-impact platform where customers can interact with some of their favorite action sports athletes
and vendors can showcase new products.

Our marketing efforts also incorporate local sporting and music event promotions, advertising in magazines

popular with our target market, interactive contest sponsorships that actively involve our customers with our
brands and products, the Zumiez Stash, which is our customer loyalty program, and various social network
channels. We believe that our immersion in the action sports lifestyle allows us to build credibility with our
target audience and gather valuable feedback on evolving customer preferences.

Distribution and Fulfillment

Timely and efficient distribution of merchandise to our stores is an important component of our overall
business strategy. During fiscal 2010, we relocated our domestic distribution center from Everett, Washington to
Corona, California to reduce distribution costs, expand capacity and increase speed of merchandise delivery to
our customers. At our Corona, California facility, merchandise is inspected, allocated to stores, ticketed when
necessary and boxed for distribution to our stores. Each store is typically shipped merchandise five times a week,
providing our stores with a steady flow of new merchandise. We currently use United Parcel Service to ship the
majority of our merchandise to our domestic stores.

During fiscal 2012, we relocated our domestic ecommerce fulfillment center from Everett, Washington to

Edwardsville, Kansas to provide the additional capacity needed to support the continued growth of our domestic

ecommerce operations, while also increasing the speed at which we get product to our customers and lowering
the freight and distribution costs once the Edwardsville, Kansas fulfillment center is running effectively and at
full capacity.

Internationally, we operate a combined distribution and ecommerce fulfillment center located in Graz,

Austria that support our Blue Tomato ecommerce and store operations in Europe and we use a third-party
distribution center located in Kamloops, British Columbia to distribute our merchandise to our Canadian stores.

Management Information Systems

Our management information systems provide integration of store, merchandising, distribution, financial
and human resources functions. The systems include applications related to point-of-sale, inventory management,
supply chain, planning, sourcing, merchandising and financial reporting. We continue to invest in technology to
align our systems with our business requirements and to support our continuing growth.

Competition

The teenage and young adult retail apparel, hardgoods and accessories industry is highly competitive. We
compete with other retailers for vendors, customers, suitable store locations and qualified store associates and
management personnel. In the softgoods market, which includes apparel, footwear and accessories, we currently
compete with other teenage and young adult focused retailers. In addition, in the softgoods markets we compete
with independent specialty shops, department stores and direct marketers that sell similar lines of merchandise
and target customers through catalogs and ecommerce. In the hardgoods markets, which includes skateboards,
snowboards, bindings, components and other equipment, we compete directly or indirectly with the following
categories of companies: other specialty retailers that compete with us across a significant portion of our
merchandising categories, such as local snowboard and skate shops; large-format sporting goods stores and
chains and ecommerce retailers.

Competition in our sector is based on, among other things, merchandise offerings, store location, price and

the ability to identify with the customer. We believe that we compete favorably with many of our competitors
based on our differentiated merchandising strategy, compelling store environment and deep-rooted culture.

Seasonality

Historically, our operations have been seasonal, with the largest portion of net sales and net income

occurring in the third and fourth fiscal quarters, reflecting increased demand during the back-to-school and
winter holiday selling seasons. During fiscal 2012, approximately 60% of our net sales occurred in the third and
fourth quarters combined, similar to previous years. As a result of this seasonality, any factors negatively
affecting us during the last half of the year, including unfavorable economic conditions, adverse weather or our
ability to acquire seasonal merchandise inventory, could have a material adverse effect on our financial condition
and results of operations for the entire year. Our quarterly results of operations may also fluctuate based upon
such factors as the timing of certain holiday seasons, the popularity of seasonal merchandise offered, the timing
and amount of markdowns, competitive influences, the number and timing of new store openings and store
remodels and closings.

Trademarks

The “Zumiez” and “Blue Tomato” trademarks and certain other trademarks, have been registered, or are the

subject of pending trademark applications, with the U.S. Patent and Trademark Office and with the registries of
certain foreign countries. We regard our trademarks as valuable and intend to maintain such marks and any
related registrations and vigorously protect our trademarks. We also own numerous domain names, which have
been registered with the Corporation for Assigned Names and Numbers.

Employees

At February 2, 2013, we employed approximately 1,700 full-time and approximately 3,600 part-time
employees globally. However, the number of part-time employees fluctuates depending on our seasonal needs
and generally increases during peak selling seasons, particularly the back-to-school and the winter holiday
seasons. None of our employees are represented by a labor union and we believe that our relationship with our
employees is good.

Financial Information about Geographic Areas

See Note 21, “Segment Reporting,” in the Notes to Consolidated Financial Statements found in Part IV
Item 15 of this Form 10-K, for information regarding net sales and long-lived assets related to domestic and
foreign operations.

Available Information

Our principal website address is www.zumiez.com. We make available, free of charge, our proxy statement,

annual report to shareholders, annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on
Form 8-K, and all amendments to those reports as soon as reasonably practicable after such material is
electronically filed with or furnished to the Securities and Exchange Commission (“SEC”) at
http://ir.zumiez.com. Information available on our website is not incorporated by reference in, and is not deemed
a part of, this Form 10-K.

Item 1A. RISK FACTORS

Investing in our securities involves a high degree of risk. The following risk factors, issues and uncertainties

should be considered in evaluating our future prospects. In particular, keep these risk factors in mind when you
read “forward-looking” statements elsewhere in this report. Forward-looking statements relate to our
expectations for future events and time periods. Generally, the words “anticipates,” “expects,” “intends,”
“may,” “should,” “plans,” “believes,” “predicts,” “potential,” “continue” and similar expressions identify
forward-looking statements. Forward-looking statements involve risks and uncertainties, and future events and
circumstances could differ significantly from those anticipated in the forward-looking statements. Any of the
following risks could harm our business, operating results or financial condition and could result in a complete
loss of your investment. Additional risks and uncertainties that are not yet identified or that we currently think
are immaterial may also harm our business and financial condition in the future.

Our ability to attract customers to our stores depends heavily on the success of the shopping malls in which
many of our stores are located; any decrease in customer traffic in those malls could cause our sales to be less
than expected.

In order to generate customer traffic we depend heavily on locating many of our stores in prominent

locations within successful shopping malls. Sales at these stores are derived, in part, from the volume of traffic in
those malls. Our stores benefit from the ability of a mall’s other tenants to generate consumer traffic in the
vicinity of our stores and the continuing popularity of malls as shopping destinations. Our sales volume and mall
traffic generally may be adversely affected by, among other things, economic downturns in a particular area,
competition from ecommerce retailers, non-mall retailers and other malls, increases in gasoline prices and the
closing or decline in popularity of other stores in the malls in which we are located. An uncertain economic
outlook could curtail new shopping mall development, decrease shopping mall traffic, reduce the number of
hours that shopping mall operators keep their shopping malls open or force them to cease operations entirely. A
reduction in mall traffic as a result of these or any other factors could have a material adverse effect on our
business, results of operations and financial condition.

Our growth strategy depends on our ability to open and operate new stores each year, which could strain our
resources and cause the performance of our existing stores to suffer.

Our growth largely depends on our ability to open and operate new stores successfully. However, our ability

to open new stores is subject to a variety of risks and uncertainties, and we may be unable to open new stores as
planned, and any failure to successfully open and operate new stores could have a material adverse effect on our
results of operations. We intend to continue to open new stores in future years while remodeling a portion of our
existing store base annually. In addition, our proposed expansion will place increased demands on our
operational, managerial and administrative resources. These increased demands could cause us to operate our
business less effectively, which in turn could cause deterioration in the financial performance of our individual
stores and our overall business. To the extent our new store openings are in markets where we already have
stores, we may experience reduced net sales in existing stores in those markets. In addition, successful execution
of our growth strategy may require that we obtain additional financing, and we cannot assure you that we will be
able to obtain that financing on acceptable terms or at all.

If we fail to effectively execute our expansion strategy, we may not be able to successfully open new store
locations in a timely manner, if at all, which could have an adverse affect on our net sales and results of
operations.

Our ability to open and operate new stores successfully depends on many factors, including, among others,

our ability to:

•

identify suitable store locations, the availability of which is outside of our control;

negotiate acceptable lease terms, including desired tenant improvement allowances;

source sufficient levels of inventory at acceptable costs to meet the needs of new stores;

hire, train and retain qualified store personnel;

successfully integrate new stores into our existing operations; and

identify and satisfy the merchandise preferences of new geographic areas.

In addition, we plan to open new stores in regions of the U.S. or international locations in which we
currently have few, or no, stores. The expansion into these markets may present competitive, merchandising,
hiring and distribution challenges that are different from those currently encountered in our existing markets.
Any of these challenges could adversely affect our business and results of operations.

Failure to successfully integrate any businesses or stores that we acquire could have an adverse impact on our
results of operations and financial performance.

We may, from time to time, acquire other retail stores or businesses, such as our acquisition of Blue
Tomato, a leading European multi-channel retailer for board sports and related apparel and footwear, which was
completed in the second quarter of fiscal 2012. We may experience difficulties in integrating any stores or
businesses we may acquire, including their facilities, personnel, financial systems, distribution, operations and
general operating procedures, and any such acquisitions may also result in the diversion of our capital and our
management’s attention from other business issues and opportunities. If we experience difficulties in integrating
acquisitions or if such acquisitions do not provide the benefits that we expect to receive, we could experience
increased costs and other operating inefficiencies, which could have an adverse effect on our results of operations
and overall financial performance.

Our plans for international expansion include risks that could have a negative impact on our results of
operations.

In fiscal 2011, we opened our first store locations in Canada and we plan to continue to open new stores in

Canada. During the second quarter of fiscal 2012, we acquired Blue Tomato, which operates primarily in the

European market, and we plan to open new stores in Europe in the future. We may continue to expand
internationally, either organically, or through additional acquisitions. International markets may have different
competitive conditions, consumer tastes and discretionary spending patterns than our existing U.S. market. As a
result, operations in international markets may be less successful than our operations in the U.S. Additionally,
consumers in international markets may not be familiar with our brands, and we may need to build brand
awareness in the markets. Furthermore, we have limited experience with the legal and regulatory environments
and market practices outside of the U.S. and cannot guarantee that we will be able to penetrate or successfully
operate in international markets. We also expect to incur additional costs in complying with applicable foreign
laws and regulations as they pertain to both our products and our operations.

Additionally, the results of operations of our international subsidiaries are exposed to foreign exchange rate

fluctuations. Upon translation, operating results may differ materially from expectations. As we expand our
international operations, our exposure to exchange rate fluctuations will increase.

Our business is dependent upon our being able to anticipate, identify and respond to changing fashion trends,
customer preferences and other fashion-related factors; failure to do so could have a material adverse effect
on us.

Customer tastes and fashion trends in the action sports lifestyle market are volatile and tend to change
rapidly. Our success depends on our ability to effectively anticipate, identify and respond to changing fashion
tastes and consumer preferences, and to translate market trends into appropriate, saleable product offerings in a
timely manner. If we are unable to successfully anticipate, identify or respond to changing styles or trends and
misjudge the market for our products or any new product lines, our sales may be lower than predicted and we
may be faced with a substantial amount of unsold inventory or missed opportunities. In response to such a
situation, we may be forced to rely on markdowns or promotional sales to dispose of excess or slow-moving
inventory, which could have a material adverse effect on our results of operations.

The current uncertainty surrounding the U.S. and global economies, including the European economy,
coupled with cyclical economic trends in action sports retailing could have a material adverse effect on our
results of operations.

The action sports retail industry historically has been subject to substantial cyclicality. As the U.S. and

global economic conditions change, the trends in discretionary consumer spending become unpredictable and
discretionary consumer spending could be reduced due to uncertainties about the future. When discretionary
consumer spending is reduced, purchases of action sports apparel and related products may decline. The current
uncertainty in the U.S. and global economies and increased government debt may have a material adverse impact
on our results of operations and financial position.

Because of this cycle, we believe the “value” message has become more important to consumers. As a
retailer that sells approximately 80% to 85% branded merchandise, this trend may negatively affect our business,
as we generally will have to charge more than vertically integrated private label retailers.

Our sales and inventory levels fluctuate on a seasonal basis, leaving our operating results particularly
susceptible to changes in back-to-school and winter holiday shopping patterns. Accordingly, our quarterly
results of operations are volatile and may fluctuate significantly.

Our quarterly results of operations have fluctuated significantly in the past and can be expected to continue

to fluctuate significantly in the future. Our sales and profitability are typically disproportionately higher in the
third and fourth fiscal quarters of each fiscal year due to increased sales during the back-to-school and winter
holiday shopping seasons. Sales during these periods cannot be used as an accurate indicator of annual results. As
a result of this seasonality, any factors negatively affecting us during the last half of the year, including
unfavorable economic conditions, adverse weather or our ability to acquire seasonal merchandise inventory,

could have a material adverse effect on our financial condition and results of operations for the entire year. In
addition, in order to prepare for the back-to-school and winter holiday shopping seasons, we must order and keep
in stock significantly more merchandise than we carry during other times of the year. Any unanticipated decrease
in demand for our products during these peak shopping seasons could require us to sell excess inventory at a
substantial markdown, which could have a material adverse effect on our business, results of operations and
financial condition.

Our quarterly results of operations are affected by a variety of other factors, including:

•

the timing of new store openings and the relative proportion of our new stores to mature stores;

• whether we are able to successfully integrate any new stores that we acquire and the presence of any

unanticipated liabilities in connection therewith;

fashion trends and changes in consumer preferences;

calendar shifts of holiday or seasonal periods;

changes in our merchandise mix;

timing of promotional events;

general economic conditions and, in particular, the retail sales environment;

actions by competitors or mall anchor tenants;

•

• weather conditions;

•

the level of pre-opening expenses associated with our new stores; and

inventory shrinkage beyond our historical average rates.

Significant fluctuations and volatility in the price of cotton, foreign labor costs and other raw materials used
in the production of our merchandise may have a material adverse effect on our business, results of
operations and financial conditions.

Increases in the cost of cotton, other raw materials, foreign labor costs and transportation costs used in the
production of our merchandise can result in higher costs in the price we pay for this merchandise. The costs for
cotton are affected by weather, consumer demand, speculation on the commodities market and other factors that
are generally unpredictable and beyond our control. Our gross profit and earnings per share could be adversely
affected to the extent that the selling prices of our products do not increase proportionately with the increases in
the costs of cotton or other materials. Increasing labor costs and oil-related product costs, such as manufacturing
and transportation costs, could also adversely impact gross profit. Additionally, significant changes in the
relationship between carrier capacity and shipper demand could increase transportation costs, which could also
adversely impact gross profit.

Most of our merchandise is produced by foreign manufacturers; therefore, the availability and costs of these
products may be negatively affected by risks associated with international trade and other international
conditions.

Most of our merchandise is produced by manufacturers around the world. Some of these facilities are
located in regions that may be affected by natural disasters, political instability or other conditions that could
cause a disruption in trade. Trade restrictions such as increased tariffs or quotas, or both, could also affect the
importation of merchandise generally and increase the cost and reduce the supply of merchandise available to us.
Any reduction in merchandise available to us or any increase in its cost due to tariffs, quotas or local issues that
disrupt trade could have a material adverse effect on our results of operations. Although the prices charged by
vendors for the merchandise we purchase are primarily denominated in U.S. dollars, a continued decline in the
relative value of the U.S. dollar to foreign currencies could lead to increased merchandise costs, which could
negatively affect our competitive position and our results of operations.

Our business is susceptible to weather conditions that are out of our control, including the potential risks of
unpredictable weather patterns and any weather patterns associated with naturally occurring global climate
change, and the resultant unseasonable weather could have a negative impact on our results of operations.

Our business is susceptible to unseasonable weather conditions. For example, extended periods of

unseasonably warm temperatures during the winter season or cool weather during the summer season (including
any weather patterns associated with global warming and cooling) could render a portion of our inventory
incompatible with those unseasonable conditions. These prolonged unseasonable weather conditions could have a
material adverse effect on our business and results of operations.

We may be unable to compete favorably in the highly competitive retail industry, and if we lose customers to
our competitors, our sales could decrease.

The teenage and young adult retail apparel, footwear, accessories and hardgoods industry is highly
competitive. We compete with other retailers for vendors, teenage and young adult customers, suitable store
locations, qualified store associates and management personnel. Some of our competitors are larger than we are
and have substantially greater financial, marketing, including advanced ecommerce marketing capabilities, and
other resources than we do. Additionally, some of our competitors may offer more options for free and/or
expedited shipping for ecommerce sales. Direct competition with these and other retailers may increase
significantly in the future, which could require us, among other things, to lower our prices and could result in the
loss of our customers. Current and increased competition could have a material adverse effect on our business,
results of operations and financial condition.

If we fail to maintain good relationships with vendors or if a vendor is otherwise unable or unwilling to supply
us with adequate quantities of their products at acceptable prices, our business and financial performance
could suffer.

Our business is dependent on continued good relations with our vendors. In particular, we believe that we

generally are able to obtain attractive pricing and other terms from vendors because we are perceived as a
desirable customer, and deterioration in our relationship with our vendors could have a material adverse effect on
our business. There can be no assurance that our vendors will provide us with an adequate supply or quality of
products or acceptable pricing. Our vendors could discontinue selling to us, raise the prices they charge at any
time or allow their merchandise to be discounted by other retailers. There can be no assurance that we will be
able to acquire desired merchandise in sufficient quantities on terms acceptable to us in the future. In addition,
certain of our vendors sell their products directly to the retail market and therefore compete with us directly and
other vendors may decide to do so in the future. There can be no assurance that such vendors will not decide to
discontinue supplying their products to us, supply us only less popular or lower quality items, raise the prices
they charge us or focus on selling their products directly. In addition, a number of our vendors are smaller, less
capitalized companies and are more likely to be impacted by unfavorable general economic and market
conditions than larger and better capitalized companies. These smaller vendors may not have sufficient liquidity
during economic downturns to properly fund their businesses and their ability to supply their products to us could
be negatively impacted. Any inability to acquire suitable merchandise at acceptable prices, or the loss of one or
more key vendors, could have a material adverse effect on our business, results of operations and financial
condition.

Our ecommerce operations subject us to numerous risks that could have an adverse effect on our results of
operations.

Our ecommerce operations subject us to certain risks that could have an adverse effect on our operational

results, including:

•

diversion of traffic and sales from our stores;

rapid technological change;

•

liability for online content; and

risks related to the computer systems that operate our website and related support systems, including
computer viruses, electronic break-ins and similar disruptions.

In addition, risks beyond our control, such as governmental regulation of ecommerce, entry of our vendors

in the ecommerce business in competition with us, online security breaches and general economic conditions
specific to ecommerce could have an adverse effect on our results of operations.

If we lose key executives or are unable to attract and retain the talent required for our business, our financial
performance could suffer.

Our performance depends largely on the efforts and abilities of our key executives. If we lose the services of

one or more of our key executives, we may not be able to successfully manage our business or achieve our
growth objectives. As our business grows, we will need to attract and retain additional qualified personnel in a
timely manner and we may not be able to do so.

Our failure to meet our staffing needs could adversely affect our ability to implement our growth strategy and
could have a material impact on our results of operations.

Our success depends in part upon our ability to attract, motivate and retain a sufficient number of qualified

employees who understand and appreciate our culture based on a passion for the action sports lifestyle and are
able to adequately represent this culture to our customers. Qualified individuals of the requisite caliber, skills and
number needed to fill these positions may be in short supply in some areas, and the employee turnover rate in the
retail industry is high. Competition for qualified employees could require us to pay higher wages to attract a
sufficient number of suitable employees. If we are unable to hire and retain store managers and store associates
capable of consistently providing a high level of customer service, as demonstrated by their enthusiasm for our
culture and knowledge of our merchandise, our ability to open new stores may be impaired and the performance
of our existing and new stores could be materially adversely affected. We are also dependent upon temporary
personnel to adequately staff our stores and distribution and ecommerce fulfillment centers particularly during
busy periods such as the back-to-school and winter holiday seasons. There can be no assurance that we will
receive adequate assistance from our temporary personnel, or that there will be sufficient sources of temporary
personnel. Although none of our employees are currently covered by collective bargaining agreements, we
cannot guarantee that our employees will not elect to be represented by labor unions in the future, which could
increase our labor costs and could subject us to the risk of work stoppages and strikes. Any such failure to meet
our staffing needs, any material increases in employee turnover rates, any increases in labor costs or any work
stoppages, interruptions or strikes could have a material adverse effect on our business or results of operations.

Our business could suffer with the closure or disruption of any of our distribution or ecommerce fulfillment
centers.

Domestically, we rely on a single distribution center located in Corona, California to receive, store and

distribute the vast majority of our merchandise to our domestic stores and we rely on a single ecommerce
fulfillment center located in Edwardsville, Kansas to ship merchandise purchased on the www.zumiez.com
website. Internationally, we operate a combined distribution and ecommerce fulfillment center located in Graz,
Austria that support our Blue Tomato ecommerce and store operations in Europe and we use a third-party
distribution center located in Kamloops, British Columbia to distribute our merchandise to our Canadian stores.
As a result, a natural disaster or other catastrophic event that affects one of the regions where we operate these
centers could significantly disrupt our operations and have a material adverse effect on our business, results of
operations and financial condition.

Additionally, we relocated our ecommerce fulfillment center to Edwardsville, Kansas during the second
quarter of fiscal 2012. As a result, events may occur during the operating periods subsequent to the relocation

that could significantly disrupt our operations and have a material adverse effect on our business, results of
operations and financial condition.

We are required to make substantial rental payments under our operating leases and any failure to make these
lease payments when due could have a material adverse effect on our business and growth plans.

Payments under operating leases account for a significant portion of our operating expenses and has
historically been our third largest expense behind cost of sales and our employee related costs. Total rent
expense, including contingent rent (or “percentage rent”) based on sales of some of our stores, real estate taxes,
insurance and common area maintenance charges, was $78.0 million, $68.8 million and $61.8 million for fiscal
2012, 2011 and 2010. At February 2, 2013, we were committed to property owners for minimum operating leases
obligations for $485.6 million. In addition, substantially all of our store leases provide for contingent rent
payments based on sales of the respective stores, as well as real estate taxes, insurance and common area
maintenance charges. These amounts generally escalate each year. We expect that any new stores we open will
also be leased by us under operating leases, which will further increase our operating lease expenses.

Our substantial operating lease obligations could have significant negative consequences, including:

•

increasing our vulnerability to general adverse economic and industry conditions;

limiting our ability to obtain additional financing;

requiring that a substantial portion of our available cash be applied to pay our rental obligations, thus
reducing cash available for other purposes; and

limiting our flexibility in planning for or reacting to changes in our business or in the industry in which
we compete, and placing us at a disadvantage with respect to some of our competitors.

We depend on cash flow from operations to pay our lease expenses and to fulfill our other cash needs. If our

business does not generate sufficient cash flow from operating activities, and sufficient funds are not otherwise
available to us from borrowings under bank loans or from other sources, we may not be able to service our
operating lease expenses, grow our business, respond to competitive challenges or fund our other liquidity and
capital needs, which could have a material adverse effect on our business.

The terms of our primary credit facility impose operating and financial restrictions on us that may impair our
ability to respond to changing business and economic conditions. These restrictions could have a significant
adverse impact on our business. Additionally, our business could suffer if our ability to acquire financing is
reduced or eliminated.

We maintain a secured credit agreement with Wells Fargo Bank, N.A., which provides us with a secured
revolving credit facility until September 1, 2013 of up to $25.0 million, which, pursuant to an accordion feature,
may be increased to $35.0 million at our discretion. The credit agreement contains a number of restrictions and
covenants that generally limit our ability to, among other things, (1) incur additional debt, (2) undergo a change
in ownership and (3) enter into certain transactions. The credit agreement also contains financial covenants that
require us to meet certain specified financial tests and ratios, including, a maximum net loss not to exceed
$10.0 million after taxes on a trailing four-quarter basis provided, that, there shall be added to net income all
charges for impairment of goodwill and store assets not to exceed $5.0 million in aggregate, and a minimum
quick ratio of 1.25. The quick ratio is defined as our cash and near cash equivalents plus certain defined
receivables divided by the outstanding borrowings. Our accounts receivable, general intangibles, inventory and
equipment have been pledged to secure our obligations under the credit agreement. We must also provide
financial information and statements to our lender. We were in compliance with all such covenants at February 2,
2013. There were no outstanding borrowings under the secured revolving credit facility at February 2, 2013 and
January 28, 2012. We had open commercial letters of credit outstanding under our secured revolving credit
facility of $0.2 million at February 2, 2013 and $0.9 million at January 28, 2012.

A breach of any of these restrictive covenants or our inability to comply with the required financial tests and

ratios could result in a default under the credit agreement. If a default occurs, the lender may elect to declare all
borrowings outstanding, together with accrued interest and other fees, to be immediately due and payable. If we
are unable to repay outstanding borrowings when due, whether at their maturity or if declared due and payable by
the lender following a default, the lender has the right to proceed against the collateral granted to it to secure the
indebtedness. As a result, any breach of these covenants or failure to comply with these tests and ratios could
have a material adverse effect on us. There can be no assurance that we will not breach the covenants or fail to
comply with the tests and ratios in our credit agreement or any other debt agreements we may enter into in the
future and, if a breach occurs, there can be no assurance that we will be able to obtain necessary waivers or
amendments from the lenders.

The restrictions contained in our credit agreement could: (1) limit our ability to plan for or react to market

conditions or meet capital needs or otherwise restrict our activities or business plans; and (2) adversely affect our
ability to finance our operations, strategic acquisitions, investments or other capital needs or to engage in other
business activities that would be in our interest.

Additionally, in the current economic environment, we cannot be assured that our borrowing relationship

with our lenders will continue or that our lenders will remain able to support their commitments to us in the
future. If our lenders fail to do so, then we may not be able to secure alternative financing on commercially
reasonable terms, or at all.

Our business could suffer if a manufacturer fails to use acceptable labor practices.

We do not control our vendors or the manufacturers that produce the products we buy from them, nor do we
control the labor practices of our vendors and these manufacturers. The violation of labor or other laws by any of
our vendors or these manufacturers, or the divergence of the labor practices followed by any of our vendors or
these manufacturers from those generally accepted as ethical in the U.S., could interrupt, or otherwise disrupt, the
shipment of finished products to us or damage our reputation. Any of these, in turn, could have a material
adverse effect on our financial condition and results of operations. In that regard, most of the products we sell are
manufactured overseas, primarily in Asia and Central America, which may increase the risk that the labor
practices followed by the manufacturers of these products may differ from those considered acceptable in the
U.S.

Additionally, our products are subject to regulation of and regulatory standards set by various governmental
authorities with respect to quality and safety. Regulations and standards in this area are currently in place. These
regulations and standards may change from time to time. Our inability to comply on a timely basis with
regulatory requirements could result in significant fines or penalties, which could adversely affect our reputation
and sales. Issues with the quality and safety of merchandise we sell, regardless of our culpability, or customer
concerns about such issues, could result in damage to our reputation, lost sales, uninsured product liability claims
or losses, merchandise recalls and increased costs.

Our failure to adequately anticipate a correct mix of private label merchandise may have a material adverse
effect on our business.

Sales from private label merchandise account for approximately 15% to 20% of our net sales and generally
carry higher gross margins than our other merchandise. We may take steps to increase the percentage of net sales
of private label merchandise in the future, although there can be no assurance that we will be able to achieve
increases in private label merchandise sales as a percentage of net sales. Our failure to anticipate, identify and
react in a timely manner to fashion trends with our private label merchandise, could have a material adverse
effect on our comparable store sales, financial condition and results of operations.

If our information systems hardware or software fails to function effectively or does not scale to keep pace
with our planned growth, our operations could be disrupted and our financial results could be harmed.

If our information systems and software do not work effectively, this could adversely impact the promptness

and accuracy of our transaction processing, financial accounting and reporting and our ability to manage our
business and properly forecast operating results and cash requirements. Additionally, we rely on third-party
service providers for certain information systems functions. If a service provider fails to provide the data quality,
communications capacity or services we require, the failure could interrupt our services and could have a
material adverse effect on our business, financial condition and results of operations. To manage the anticipated
growth of our operations and personnel, we may need to continue to improve our operational and financial
systems, transaction processing, procedures and controls, and in doing so could incur substantial additional
expenses that could impact our financial results.

The security of our databases that contain personal information of our retail customers could be breached,
which could subject us to adverse publicity, litigation and expenses. In addition, if we are unable to comply
with security standards created by the credit card industry, our operations could be adversely affected.

Database privacy, network security and identity theft are matters of growing public concern. In an attempt to

prevent unauthorized access to our network and databases containing confidential, third-party information, we
have installed privacy protection systems, devices and activity monitoring on our networks. Nevertheless, if
unauthorized parties gain access to our networks or databases, they may be able to steal, publish, delete or
modify our private and sensitive third-party information. In such circumstances, we could be held liable to our
customers or other parties or be subject to regulatory or other actions for breaching privacy rules. This could
result in costly investigations and litigation, civil or criminal penalties and adverse publicity that could adversely
affect our financial condition, results of operations and reputation. Further, if we are unable to comply with the
security standards established by banks and the credit card industry, we may be subject to fines, restrictions and
expulsion from card acceptance programs, which could adversely affect our retail operations.

Our inability or failure to protect our intellectual property or our infringement of other’s intellectual property
could have a negative impact on our operating results.

We believe that our trademarks and domain names are valuable assets that are critical to our success. The
unauthorized use or other misappropriation of our trademarks or domain names could diminish the value of the
Zumiez or Blue Tomato brands, our store concepts, our private label brands or our goodwill and cause a decline
in our net sales. Although we have secured or are in the process of securing protection for our trademarks and
domain names in a number of countries outside of the U.S., there are certain countries where we do not currently
have or where we do not currently intend to apply for protection for certain trademarks or at all. Also, the efforts
we have taken to protect our trademarks may not be sufficient or effective. Therefore, we may not be able to
prevent other persons from using our trademarks or domain names outside of the U.S., which also could
adversely affect our business. We are also subject to the risk that we may infringe on the intellectual property
rights of third parties. Any infringement or other intellectual property claim made against us, whether or not it
has merit, could be time-consuming, result in costly litigation, cause product delays or require us to pay royalties
or license fees. As a result, any such claim could have a material adverse effect on our operating results.

The effects of war or acts of terrorism could adversely affect our business.

Most of our stores are located in shopping malls. Any threat of terrorist attacks or actual terrorist events,

particularly in public areas, could lead to lower customer traffic in shopping malls. In addition, local authorities
or mall management could close shopping malls in response to security concerns. Mall closures, as well as lower
customer traffic due to security concerns, could result in decreased sales. Additionally, the armed conflicts in the
Middle East, or the threat, escalation or commencement of war or other armed conflict elsewhere, could
significantly diminish consumer spending, and result in decreased sales for us. Decreased sales could have a
material adverse effect on our business, financial condition and results of operations.

The outcome of litigation could have a material adverse effect on our business, and may result in substantial
costs and could divert management’s attention.

We are involved, from time to time, in litigation incidental to our business including complaints filed by
investors. This litigation could result in substantial costs, and could divert management’s attention and resources,
which could harm our business. Risks associated with legal liability are often difficult to assess or quantify, and
their existence and magnitude can remain unknown for significant periods of time. There can be no assurance
that the actual outcome of pending or future litigation will not have a material adverse effect on our results of
operations or financial condition. Additionally, while we maintain director and officer liability insurance for
litigation surrounding investor lawsuits, the amount of insurance coverage may not be sufficient to cover a claim
and the continued availability of this insurance cannot be assured.

Our operations expose us to the risk of litigation, which could lead to significant potential liability and costs
that could harm our business, financial condition or results of operations.

We employ a substantial number of full-time and part-time employees, a majority of whom are employed at
our store locations. As a result, we are subject to a large number of federal, state and foreign laws and regulations
relating to employment. This creates a risk of potential claims that we have violated laws related to
discrimination and harassment, health and safety, wage and hour laws, criminal activity, personal injury and
other claims. We are also subject to other types of claims in the ordinary course of our business. Some or all of
these claims may give rise to litigation, which could be time-consuming for our management team, costly and
harmful to our business.

In addition, we are exposed to the risk of class action litigation. The costs of defense and the risk of loss in
connection with class action suits are greater than in single-party litigation claims. Due to the costs of defending
against such litigation, the size of judgments that may be awarded against us, and the loss of significant
management time devoted to such litigation, we cannot assure you that such litigation will not disrupt our
business or impact our financial results.

Our failure to comply with federal, state, local or foreign laws, or changes in these laws, could have an
adverse impact on our results of operations and financial performance.

Our business is subject to a wide array of laws and regulations. Changes in the regulations, the imposition of

additional regulations, or the enactment of any new legislation including those related to health care, taxes,
privacy, environmental issues and trade, could adversely affect our results of operations or financial condition.

Enacted federal health care legislation could increase our expenses.

We are self-insured with respect to our health care coverage in the U.S. and do not purchase third party
insurance for the health insurance benefits provided to employees with the exception of pre-defined stop loss
coverage, which helps limit the cost of large claims. In March 2010, The Patient Protection and Affordable Care
Act was enacted requiring employers such as us to provide health insurance for all qualifying employees or pay
penalties for not providing coverage. The most significant increases in cost will occur in fiscal 2014. We are
evaluating the impact the new law will have on us, and although we cannot predict with certainty the financial
and operational impacts the new law will have, we expect to be required to provide health benefits to more
employees than we currently do, which could raise our labor costs. While the majority of these costs will begin in
fiscal 2014, there is no assurance that we will be able to absorb and/or pass through the costs of such legislation
in a manner that will not adversely impact our results or operations.

We have incurred and will continue to incur significant expenses as a result of being a public company, which
will negatively impact our financial performance.

We completed our initial public offering in May 2005 and we have incurred and could continue to incur
significant legal, accounting, insurance and other expenses as a result of being a public company. Rules and

regulations implemented by Congress, the SEC and the Nasdaq Global Select Market have required changes in
corporate governance practices of public companies. Compliance with these laws could cause us to incur
significant costs and expenses, including legal and accounting costs, and could make some compliance activities
more time-consuming and negatively impact our financial performance. Additionally, these rules and regulations
may make it more expensive for us to obtain director and officer liability insurance. As a result, it may be more
difficult for us to attract and retain qualified persons to serve on our board of directors or as officers.

Failure to maintain adequate financial and management processes and controls could lead to errors in our
financial reporting and could harm our ability to manage our expenses.

Reporting obligations as a public company and our anticipated growth, both domestically and

internationally, are likely to place a considerable strain on our financial and management systems, processes and
controls, as well as on our personnel. In addition, we are required to document and test our internal controls over
financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act of 2002 so that our management can
certify as to the effectiveness of our internal controls and our independent registered public accounting firm can
render an opinion on the effectiveness of our internal control over financial reporting on an annual basis. This
process requires us to document our internal controls over financial reporting and to potentially make significant
changes thereto, if applicable. As a result, we have incurred and expect to continue to incur substantial expenses
to test our financial controls and systems, and we have been and in the future may be required to improve our
financial and managerial controls, reporting systems and procedures, to incur substantial expenses to make such
improvements and to hire additional personnel. If our management is ever unable to certify the effectiveness of
our internal controls or if our independent registered public accounting firm cannot render an opinion on the
effectiveness of our internal control over financial reporting, or if material weaknesses in our internal controls are
ever identified, we could be subject to regulatory scrutiny and a loss of public confidence, which could have a
material adverse effect on our business and our stock price. In addition, if we do not maintain adequate financial
and management personnel, processes and controls, we may not be able to accurately report our financial
performance on a timely basis, which could cause a decline in our stock price and adversely affect our ability to
raise capital.

Changes to accounting rules or regulations could significantly affect our financial results.

Our consolidated financial statements are prepared in accordance with generally accepted accounting
principles in the United States of America (“U.S. GAAP”). New accounting rules or regulations and changes to
existing accounting rules or regulations have occurred and may occur in the future. Future changes to accounting
rules or regulations, such as changes to lease accounting guidance or a requirement to convert to international
financial reporting standards, could negatively affect our results of operations and financial condition through
increased cost of compliance.

We may fail to meet analyst expectations, which could cause the price of our stock to decline.

Our common stock is traded publicly and various securities analysts follow our financial results and issue

reports on us. These reports include information about our historical financial results as well as the analysts’
estimates of our future performance. The analysts’ estimates are based upon their own independent opinions and
can be different from our estimates or expectations. If our operating results are below the estimates or
expectations of public market analysts and investors, our stock price could decline. In December 2007, a
securities class action litigation and associated derivative lawsuits was brought against us and such actions are
frequently brought against other companies following a decline in the market price of their securities. These
lawsuits were dismissed with prejudice in March 2009. If our stock price is volatile, we may become involved in
this type of litigation in the future. Any litigation could result in substantial costs and a diversion of
management’s attention and resources that are needed to successfully run our business.

The value of our investments may fluctuate.

We have our excess cash primarily invested in state and local municipal securities, corporate debt securities
and variable-rate demand notes. These investments have historically been considered very safe investments with
minimal default rates. At February 2, 2013, we had $87.6 million of investments in state and local government
securities and variable-rate demand notes. These securities are not guaranteed by the U.S. government and are
subject to additional credit risk based upon each local municipality’s tax revenues and financial stability. As a
result, we may experience a reduction in value or loss of liquidity of our investments, which may have a negative
adverse effect on our results of operations, liquidity and financial condition.

A decline in the market price of our stock and our performance may trigger an impairment of the goodwill
and other indefinite-lived intangible assets recorded on the consolidated balance sheets.

Goodwill and other indefinite-lived intangible assets are required to be tested for impairment at least
annually or more frequently if management believes indicators of impairment exist. Any reduction in the
carrying value of our goodwill or other indefinite-lived intangible assets as a result of our impairment analysis
could result in a non-cash impairment charge. An impairment charge could have a significant impact on earnings
and potentially result in a violation of our financial covenants, thereby limiting our ability to secure short-term
financing.

Reduced operating results and cash flows may cause us to incur impairment charges.

We review the carrying value of our fixed assets for impairment whenever events or changes in

circumstances indicate that the carrying value of such asset may not be recoverable. The review could result in a
non-cash impairment charge related to underperforming stores, which could impact our results of operations.

Item 1B. UNRESOLVED STAFF COMMENTS

None.

Item 2.

PROPERTIES

All of our stores are occupied under operating leases and encompassed approximately 1,480,000 total square

feet at February 2, 2013.

We own approximately 356,000 square feet of developable land in Lynnwood, Washington, and completed

construction of our new 63,071 square foot global home office in fiscal 2012. Additionally, we lease 12,917
square feet of office space in Schladming, Austria for our European home office.

We own a 168,450 square foot building in Corona, California that serves as our domestic warehouse and
distribution center. We lease 94,428 square feet of a facility in Edwardsville, Kansas that serves as our domestic
ecommerce fulfillment center. This lease expires in 2022 and we have the option to lease up to 153,095 square
feet of the facility under this lease agreement.

We lease a 51,667 square feet combined distribution and ecommerce fulfillment center in Graz, Austria that

supports our Blue Tomato ecommerce and store operations in Europe.

Additionally, we are under lease for a 59,972 square foot location in Everett, Washington that was

previously used for a portion of our combined home office and ecommerce fulfillment center. This lease expires
in 2017. See Note 19, “Exit and Disposal Activities,” in the Notes to Consolidated Financial Statements found in
Part IV Item 15 of this Form 10-K, for additional information related to this location.

Item 3.

LEGAL PROCEEDINGS

We are involved from time to time in litigation incidental to our business. We believe that the outcome of

current litigation is not expected to have a material adverse effect on our results of operations or financial
condition.

See Note 11, “Commitments and Contingencies,” and Note 22, “Subsequent Event,” in the Notes to

Consolidated Financial Statements found in Part IV Item 15 of this Form 10-K, for additional information related
to legal proceedings.

Item 4.

MINE SAFETY DISCLOSURES

Not applicable.

PART II

Item 5.

MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER
MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information

Our common stock is traded on the Nasdaq Global Select Market under the symbol “ZUMZ.” At

February 2, 2013, there were 30,113,878 shares of common stock outstanding. The following table sets forth the
high and low sales prices for our common stock on the Nasdaq Global Select Market for fiscal 2012 and fiscal
2011.

Fiscal 2012

First Fiscal Quarter (January 29, 2012—April 28, 2012) . . . . . . . . . . . . .
Second Fiscal Quarter (April 29, 2012—July 28, 2012)
. . . . . . . . . . . . .
Third Fiscal Quarter (July 29, 2012—October 27, 2012) . . . . . . . . . . . . .
Fourth Fiscal Quarter (October 28, 2012—February 2, 2013) . . . . . . . . .

Fiscal 2011

High

Low

$38.79
$41.96
$38.57
$26.94

$27.66
$31.65
$24.60
$17.93

High

Low

First Fiscal Quarter (January 30, 2011—April 30, 2011) . . . . . . . . . . . . .
Second Fiscal Quarter (May 1, 2011—July 30, 2011) . . . . . . . . . . . . . . .
Third Fiscal Quarter (July 31, 2011—October 29, 2011) . . . . . . . . . . . . .
Fourth Fiscal Quarter (October 30, 2011—January 28, 2012) . . . . . . . . .

$29.88
$30.90
$27.23
$32.49

$22.13
$21.91
$15.85
$20.74

Performance Measurement Comparison

The following graph shows a comparison for total cumulative returns for Zumiez Inc., the Nasdaq
Composite Index and the Nasdaq Retail Trade Index during the period commencing on February 2, 2008 and
ending on February 2, 2013. The comparison assumes $100 was invested on February 2, 2008 in each Zumiez,
the Nasdaq Composite Index and the Nasdaq Retail Trade Index, and assumes the reinvestment of all dividends,
if any. The comparison in the following graph and table is required by the SEC and is not intended to be a
forecast or to be indicative of future Company common stock performance.

COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
Among Zumiez Inc., the Nasdaq Composite Index,
and the Nasdaq Retail Trade Index

$250

$200

$150

$100

$50

2/2/08

1/31/09

1/30/10

1/29/11

1/28/12

2/2/13

Zumiez Inc.

Nasdaq Composite

Nasdaq Retail Trade

*$100 invested on 2/2/08 in stock or 1/31/08 in index, including reinvestment of dividends.
Indexes calculated on month-end basis.

Zumiez Inc.
Nasdaq Composite
Nasdaq Retail Trade

2/2/08

1/3/09

1/30/10

1/29/11

1/28/12

2/2/13

$100.00
100.00
100.00

$35.68
60.26
68.37

$ 63.52
84.82
115.76

$111.33
110.53
153.63

$141.37
114.46
178.14

$105.34
128.46
221.93

Holders of the Company’s Capital Stock

We had 326 shareholders of record as of March 1, 2013.

Dividends

No cash dividends have been declared on our common stock to date nor have any decisions been made to

pay a dividend in the foreseeable future. Payment of dividends is evaluated on a periodic basis.

Recent Sales of Unregistered Securities

None

Issuer Purchases of Equity Securities

The following table presents information with respect to purchases of our common stock made during the

fourteen weeks ended February 2, 2013 (in thousands, except average price paid per share):

Period

Total Number of
Shares
Purchased

Average Price
Paid per Share

Total Number of
Shares Purchased as
Part of Publicly
Announced Plans or
Programs (1)

Dollar Value of
Shares that May Yet
be Repurchased
Under the Plans or
Programs (1)

October 28, 2012—November 24, 2012 . . . . .
November 25, 2012—December 29, 2012 . . .
December 30, 2012—February 2, 2013 . . . . .

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

—
1,081
184

1,265

$ —

20.36
20.86

—
1,081
184

1,265

$ 22,000
20,000
16,155

(1) The share repurchase program is conducted under authorizations made from time to time by our Board of
Directors. In November 2012, we publicly announced that our Board of Directors authorized us to
repurchase up to $22.0 million of our common stock. This repurchase program was completed in December
2012. In December 2012, we publicly announced that our Board of Directors authorized us to repurchase up
to an additional $20.0 million of our common stock. The repurchase program is expected to continue
through fiscal 2013 that will end on February 1, 2014, unless the time period is extended or shortened by the
Board of Directors.

Item 6.

SELECTED FINANCIAL DATA

The following selected consolidated financial information has been derived from our audited Consolidated

Financial Statements. The data should be read in conjunction with our Consolidated Financial Statements and the
notes thereto, and Management’s Discussion and Analysis of Financial Condition and Results of Operations
included elsewhere herein.

Fiscal Year Ended

February 2,
2013 (1)

January 28,
2012

January 29,
2011

January 30,
2010

January 31,
2009

Statement of Operations Data (in thousands,

except per share data):

Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cost of goods sold . . . . . . . . . . . . . . . . . . . . . . . . .

$669,393
428,109

$555,874
354,198

$478,849
311,028

$407,603
274,396

$408,669
274,134

Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Selling, general and administrative expenses . . . . .

241,284
172,742

201,676
141,444

167,821
130,454

133,207
120,472

134,535
109,927

. . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating profit
Interest income, net
. . . . . . . . . . . . . . . . . . . . . . . .
Other income (expense), net . . . . . . . . . . . . . . . . . .

Earnings before income taxes . . . . . . . . . . . . . . . .
Provision for income taxes . . . . . . . . . . . . . . . . . . .

68,542
1,410
327

70,279
28,115

60,232
1,836
(379)

61,689
24,338

37,367
1,496
(8)

38,855
14,652

12,735
1,176
96

14,007
4,876

24,608
2,059
36

26,703
9,499

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 42,164

$ 37,351

$ 24,203

Earnings per share:
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Weighted average shares outstanding:
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other Financial Data (in thousands, except
gross margin and operating margin):

Gross margin (2) . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating margin (3) . . . . . . . . . . . . . . . . . . . . . . .
Capital expenditures . . . . . . . . . . . . . . . . . . . . . . . .
Depreciation, amortization and accretion . . . . . . . .

Store Data:
Number of stores open at end of period . . . . . . . . .
Comparable store sales increase (decrease) (4) . . .
Net sales per store (5) (in thousands) . . . . . . . . . . .
Total store square footage (6) (in thousands) . . . . .
Average square footage per store (7) . . . . . . . . . . .
Net sales per square foot (8) . . . . . . . . . . . . . . . . . .

1.37

1.35

1.22

1.20

0.81

0.79

9,131

$ 17,204

0.31

0.30

0.59

0.58

30,742
31,273

30,527
31,119

29,971
30,794

29,499
30,133

29,127
29,694

36.0%
10.2%

36.3%
10.8%

35.0%
7.8%

32.7%
3.1%

32.9%
6.0%

$ 41,070
$ 22,957

$ 25,508
$ 19,744

$ 29,124
$ 17,923

$ 16,004
$ 22,092

$ 28,349
$ 19,470

500
5.0%

444
8.7%

400
11.9%

1,240
1,480
2,961
421

1,210
1,308
2,945
411

1,162
1,174
2,935
396

377
(10.0%)
1,081
1,107
2,937
367

343
(6.5%)

1,240
1,005
2,930
424

February 2,
2013

January 28,
2012

January 29,
2011

January 30,
2010

January 31,
2009

Balance Sheet Data (in thousands):
Cash, cash equivalents and current marketable

securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Working capital (9)
. . . . . . . . . . . . . . . . . . . . . . . .
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total long-term liabilities . . . . . . . . . . . . . . . . . . . .
Total shareholders’ equity . . . . . . . . . . . . . . . . . . .

$103,172
146,115
409,098
48,478
303,421

$172,798
197,927
362,157
34,304
272,277

$128,801
155,400
301,631
29,435
226,735

$108,051
133,927
260,265
27,802
192,676

$ 78,582
112,092
233,349
24,177
177,951

(1) The fiscal year ended February 2, 2013 consisted of 53 weeks. All other fiscal years presented consisted of

52 weeks. Additionally, in July 2012, we acquired Blue Tomato for cash consideration of 59.5 million Euros
($74.8 million).

(2) Gross margin represents gross profit divided by net sales.

(3) Operating margin represents operating profit divided by net sales.

(4) Comparable store sales percentage changes are calculated by comparing comparable store sales for the

applicable fiscal year to comparable store sales for the prior fiscal year. See “Management’s Discussion and
Analysis of Financial Condition and Results of Operations—General” for more information about how we
compute comparable store sales.

(5) Net sales per store represents net sales, excluding ecommerce sales, for the period divided by the average

number of stores open during the period. For purposes of this calculation, the average number of stores open
during the period is equal to the sum of the number of stores open as of the end of each month during the
fiscal year divided by the number of months in the fiscal year.

(6) Total store square footage includes retail selling, storage and back office space at the end of the fiscal year.

(7) Average square footage per store is calculated based on the total store square footage at the end of the fiscal

year, including retail selling, storage and back office space, of all stores open at the end of the fiscal year.

(8) Net sales per square foot represents net sales, excluding ecommerce sales, for the period divided by the

average square footage of stores open during the period. For purposes of this calculation, the average square
footage of stores open during the period is equal to the sum of the total square footage of the stores open as
of the end of each month during the fiscal year divided by the number of months in the fiscal year.

(9) Working capital is defined as current assets minus current liabilities.

Item 7.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in

conjunction with our consolidated financial statements and related notes included elsewhere in this document.
This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results
could differ materially from those anticipated in these forward-looking statements as a result of certain factors,
including those discussed in “Item 1A Risk Factors.” See the cautionary note regarding forward-looking
statements set forth at the beginning of Part I of the Annual Report on Form 10-K.

Fiscal 2012—A Review of This Past Year

In fiscal 2012, Zumiez achieved record sales and earnings levels and continued to build on the momentum

we had seen in fiscal 2011. During the year, we continued to make strategic investments that we believe will reap
long-term benefits focused on enhancing the customer experience across multiple sales channels, domestic and
international growth and on our people and infrastructure aimed at improving decision making and product speed
to market. In July 2012, we completed the acquisition of Blue Tomato. Blue Tomato is a multi-channel retailer

for board sports and related apparel and footwear in the European marketplace. The Blue Tomato acquisition
represents a presence in the European action sports market with an established brand identity and operational
philosophies that are strategically aligned with Zumiez.

The following table shows net sales, operating profit and margin and diluted earnings per share growth for

fiscal 2012 compared to fiscal 2011. The fiscal 2012 results include $7.3 million in costs associated with the
acquisition of Blue Tomato, including one-time acquisition costs, amortization of intangible assets and the costs
associated with the future incentive payments related to the transaction as well as $2.1 million in charges for the
relocation of our home office and ecommerce fulfillment center:

Fiscal Year Ended

February 2, 2013 (1)

January 28, 2012 % Change

Net sales (in thousands) . . . . . . . . . . . . . . . . . . . . . .
Operating profit (in thousands) . . . . . . . . . . . . . . . .
Operating margin . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted earnings per share . . . . . . . . . . . . . . . . . . . .

$669,393
$ 68,542

10.2%
1.35

$555,874
$ 60,232

10.8%
1.20

20%
14%

13%

(1) The fiscal year ended February 2, 2013 consisted of 53 weeks versus 52 weeks in the fiscal year ended

January 28, 2012.

The increase in net sales reflected a comparable store sales increase of 5.0% for fiscal 2012 as well as the

net addition of 56 stores (61 new or acquired stores offset by five store closures), which includes the acquisition
of Blue Tomato during the second quarter of fiscal 2012. The increase in comparable stores sales was primarily
driven by an increase in dollars per transaction partially offset by a decrease in comparable store transactions.
Dollars per transaction increased primarily due to an increase in average unit retail, partially offset by a decline
in units per transaction. These sales results were achieved with record product margins, demonstrating the
strength of our distinctive product offering and the unique customer experience our store associates provide. As a
result of our continued focus on managing our cost structure, these sales results translated into strong operating
profit and diluted earnings per share growth despite the impact of charges related to the acquisition costs
associated with Blue Tomato and relocation of our home office and ecommerce fulfillment center.

While the results of fiscal 2012 were positive, the back half of the year trended downward, particularly in

the fourth quarter when same store sales decreased 1.0%. Contributing to these results were category challenges
as we faced headwinds, such as footwear and snow hardgoods and outerwear.

Fiscal 2013—A Look At the Upcoming Year

As we enter fiscal 2013, we continue to face some of the challenges we encountered during the second half

of fiscal 2012. In addition, we believe that consumers continue to face challenging economic conditions and
uncertainty both domestically and globally that cause concern in the retail environment and lead us to be cautious
in our outlook for the coming year. However, regardless of the macro economic landscape, we believe that we
are well positioned to perform well relative to other retailers by staying true to what makes us unique while
continuing to make return based investments.

Long-term we aim to grow sales annually and grow operating profit at a faster rate than sales by focusing on

our growth initiatives while managing our cost structure. Our primary growth vehicles are:

Initiatives that drive comparable store sales gains;

1.
2. Opening high return stores;
3.
4.

Ecommerce penetration; and
International growth

In fiscal 2013, we expect total sales to increase driven by an increase in comparable store sales, the opening

of approximately 60 new stores, including approximately 15 stores through international expansion in Canada
and Europe, increased sales from our ecommerce channel and a full year of sales attributed to the Blue Tomato
acquisition. If we achieve our sales projections, we expect earnings will increase. We will make further
investments in people and infrastructure in fiscal 2013, building on the progress we have made through fiscal
2012, primarily focused on the development of our omni-channel sales strategies and our international growth.
We anticipate inventory levels per square foot to grow slightly. We expect our cash, short-term investments and
working capital to increase, and do not anticipate any new borrowings during the year.

General

Net sales constitute gross sales net of actual and estimated returns, deductions for promotions and shipping

revenue. Net sales include our in-store sales and our ecommerce sales. We record the sale of gift cards as a
current liability and recognize revenue when a customer redeems a gift card. Additionally, the portion of gift
cards that will not be redeemed (“gift card breakage”) is recognized in net sales after 24 months, at which time
the likelihood of redemption is considered remote based on our historical redemption data.

We report “comparable store sales” based on net sales beginning on the first anniversary of the first day of
operation of a new store or ecommerce business. We operate a sales strategy that integrates our stores with our
ecommerce platform. There is significant interaction between our in-store sales and our ecommerce sales
channels and we believe that they are utilized in tandem to serve our customers. Therefore, our comparable store
sales also include our ecommerce sales. Changes in our comparable store sales between two periods are based on
net sales of “in-store” or ecommerce businesses which were in operation during both of the two periods being
compared and, if a in-store or ecommerce business is included in the calculation of comparable store sales for
only a portion of one of the two periods being compared, then that in-store or ecommerce business is included in
the calculation for only the comparable portion of the other period. Any change in square footage of an existing
comparable store, including remodels and relocations, does not eliminate that store from inclusion in the
calculation of comparable store sales. Any store or ecommerce business that we acquire will be included in the
calculation of comparable store sales after the first anniversary of the acquisition date. As such, Blue Tomato
results will not be included in the calculation of comparable store sales until July 2013. There may be variations
in the way in which some of our competitors and other apparel retailers calculate comparable or same store sales.
As a result, data herein regarding our comparable store sales may not be comparable to similar data made
available by our competitors or other retailers.

Cost of goods sold consists of branded merchandise costs and our private label merchandise costs including

design, sourcing, importing and inbound freight costs. Our cost of goods sold also includes shrinkage, buying,
occupancy, ecommerce fulfillment, distribution and warehousing costs (including associated depreciation) and
freight costs for store merchandise transfers. This may not be comparable to the way in which our competitors or
other retailers compute their cost of goods sold. Cash consideration received from vendors, is reported as a
reduction of cost of goods sold if the inventory has sold, a reduction of the carrying value of the inventory if the
inventory is still on hand, or a reduction of selling, general and administrative expense if the amounts are
reimbursements of specific, incremental and identifiable costs of selling the vendors’ products.

With respect to the freight component of our ecommerce sales, amounts billed to our customers are included

in net sales and the related freight cost is charged to cost of goods sold.

Selling, general and administrative expenses consist primarily of store personnel wages and benefits,
administrative staff and infrastructure expenses, freight costs for merchandise shipments from the distribution
centers to the stores, store supplies, depreciation on fixed assets at our home office and stores, facility expenses
and training, advertising and marketing costs. Credit card fees, insurance, public company expenses, legal
expenses, amortization of intangibles and other miscellaneous operating costs are also included in selling, general
and administrative expenses. This may not be comparable to the way in which our competitors or other retailers
compute their selling, general and administrative expenses.

Key Performance Indicators

Our management evaluates the following items, which we consider key performance indicators, in assessing

our performance:

Comparable store sales. As previously described in detail under the caption “General,” comparable store

sales provide a measure of sales growth for stores and ecommerce businesses open at least one year over the
comparable prior year period.

We consider comparable store sales to be an important indicator of our current performance. Comparable
store sales results are important to achieve leveraging of our costs, including store payroll and store occupancy.
Comparable store sales also have a direct impact on our total net sales, operating profit, cash and working capital.

Gross profit. Gross profit measures whether we are optimizing the price and inventory levels of our
merchandise. Gross profit is the difference between net sales and cost of goods sold. Any inability to obtain
acceptable levels of initial markups or any significant increase in our use of markdowns could have an adverse
effect on our gross profit and results of operations.

Operating profit. We view operating profit as a key indicator of our success. The key drivers of operating

profit are comparable store sales, gross profit, our ability to control selling, general and administrative expenses
and our level of capital expenditures affecting depreciation expense.

Critical Accounting Estimates

Our consolidated financial statements are prepared in accordance with U.S. GAAP. In connection with the
preparation of our consolidated financial statements, we are required to make assumptions and estimates about
future events, and apply judgments that affect the reported amounts of assets, liabilities, revenue, expenses and
the related disclosures. We base our assumptions, estimates and judgments on historical experience, current
trends and other factors that management believes to be relevant at the time our consolidated financial statements
are prepared. On a regular basis, we review the accounting policies, assumptions, estimates and judgments to
ensure that our consolidated financial statements are presented fairly and in accordance with U.S. GAAP.
However, because future events and their effects cannot be determined with certainty, actual results could differ
from our assumptions and estimates, and such differences could be material.

Our significant accounting policies are discussed in Note 2, “Summary of Significant Accounting Policies,”

in the Notes to Consolidated Financial Statements found in Part IV Item 15 of this Form 10-K. We believe that
the following accounting estimates are the most critical to aid in fully understanding and evaluating our reported
financial results, and they require our most difficult, subjective or complex judgments, resulting from the need to
make estimates about the effect of matters that are inherently uncertain.

Description

Judgments and Uncertainties

Effect If Actual Results Differ
From Assumptions

Our write-down reserve contains
uncertainties because the calculation
requires management to make
assumptions based on the current rate of
sales, the age and profitability of
inventory and other factors.

Our shrinkage reserve contains
uncertainties because the calculation
requires management to make
assumptions and to apply judgment
regarding a number of factors, including
historical percentages that can be affected
by changes in merchandise mix and
changes in actual shrinkage trends.

Our impairment loss calculations contain
uncertainties because they require
management to make assumptions and to
apply judgment to estimate future cash
flows and asset fair values, including
forecasting future sales, gross profit and
operating expenses.

Our fixed assets accounting methodology
contains uncertainties because it requires
management to make estimates with
respect to the useful lives of our fixed
assets that we believe are reasonable.

We have not made any material changes in
the accounting methodology used to
calculate our write-down and shrinkage
reserves in the past three fiscal years. We
do not believe there is a reasonable
likelihood that there will be a material
change in the future estimates or
assumptions we use to calculate our
inventory reserves. However, if actual
results are not consistent with our estimates
and assumptions, we may be exposed to
losses or gains that could be material.

A 10% decrease in ultimate sales price at
February 2, 2013 would have decreased net
income by $0.1 million in fiscal 2012.

A 10% increase in actual physical inventory
shrinkage reserved at February 2, 2013
would have decreased net income by
$0.2 million in fiscal 2012.

We do not believe there is a reasonable
likelihood that there will be a material
change in the estimates or assumptions we
use to calculate fixed asset impairment
losses. However, if actual results are not
consistent with our estimates and
assumptions, our operating results could be
adversely affected.

Although management believes that the
current useful lives estimates assigned to
our fixed assets are reasonable, factors
could cause us to change our estimates, thus
affecting the future calculation of
depreciation.

Valuation of Merchandise Inventories

We value our inventory at the lower of cost or
fair market value through the establishment of
write-down and inventory loss reserves.

Our write-down reserve represents the excess
of the carrying value over the amount we
expect to realize from the ultimate sales or
other disposal of the inventory. Write-downs
establish a new cost basis for our inventory.
Subsequent changes in facts or circumstances
do not result in the restoration of previously
recorded write-downs or an increase in that
newly established cost basis.

Our inventory loss reserve represents
anticipated physical inventory losses
(“shrinkage reserve”) that have occurred since
the last physical inventory dates.

Fixed Assets

We review the carrying value of our fixed
assets for impairment whenever events or
changes in circumstances indicate that the
carrying value of such asset may not be
recoverable.

Recoverability of assets to be held and used is
determined by a comparison of the carrying
amount of an asset to future undiscounted net
cash flows expected to be generated by the
asset. If such assets are considered impaired,
the impairment recognized is measured by
comparing the projected discounted cash flow
of the asset to the asset carrying value.
Declines in projected cash flow of the assets
could result in impairment.

The actual economic lives of our fixed assets
may be different from our estimated useful
lives, thereby resulting in a different carrying
value. These evaluations could result in a
change in the depreciable lives of these assets
and therefore our depreciation expense in
future periods.

Description

Judgments and Uncertainties

Effect If Actual Results Differ
From Assumptions

Revenue Recognition

Revenue is recognized upon purchase at our
retail store locations. For our ecommerce sales,
revenue is recognized upon estimated delivery
to the customer. Revenue is recorded net of
estimated and actual sales returns and
deductions for promotions.

Revenue is not recorded on the sale of gift
cards. We record the sale of gift cards as a
current liability and recognize revenue when a
customer redeems a gift card. Additionally, an
estimate of the portion of gift cards that is not
expected to be redeemed (“gift card breakage”)
is recognized in net sales after 24 months, at
which time the likelihood of redemption is
considered remote based on our historical
redemption data.

Our revenue recognition accounting
methodology contains uncertainties
because it requires management to make
assumptions regarding future sales returns
and the amount and timing of gift cards
projected to be redeemed by gift card
recipients. Our estimate of the amount and
timing of sales returns and gift cards to be
redeemed is based primarily on historical
transaction experience.

Stock-Based Compensation

We maintain the Zumiez Inc. 2005 Equity
Incentive Plan under which restricted stock and
non-qualified stock options have been granted
to employees and non-employee directors.

We determine the fair value of our restricted
stock awards based on the closing market price
of our stock on the grant date. In determining
the fair value of our stock options, we use the
Black-Scholes option pricing model. The
estimated fair value of stock-based awards is
recognized as compensation expense over the
vesting period, net of estimated forfeitures.

The calculation of stock-based
compensation expense requires
management to make assumptions and to
apply judgment to estimate the number of
stock awards that will ultimately vest and
to determine the fair value of our stock
option awards. These assumptions and
judgments include estimating future
employee turnover rates and the inputs to
the Black-Scholes option pricing model,
including expected term. Changes in these
assumptions can materially affect our
stock-based compensation expense.

We have not made any material changes in
the accounting methodology used to
measure future sales returns or recognize
revenue for our gift card program in the past
three fiscal years. We do not believe there is
a reasonable likelihood that there will be a
material change in the future estimates or
assumptions we use to recognize revenue.
However, if actual results are not consistent
with our estimates or assumptions, we may
be exposed to losses or gains that could be
material.

A 10% increase in our sales return reserve
at February 2, 2013 would have decreased
net income by $0.1 million in fiscal 2012.

A 10% increase in our unredeemed gift card
breakage life at February 2, 2013 would
have decreased net income by $0.3 million
in fiscal 2012.

We do not believe there is a reasonable
likelihood there will be a material change in
the future estimates or assumptions we use
to determine stock-based compensation
expense. However, if actual results are not
consistent with our estimates or
assumptions, we may be exposed to
changes in stock-based compensation
expense that could be material.

Description

Judgments and Uncertainties

Effect If Actual Results Differ
From Assumptions

Accounting for Income Taxes

As part of the process of preparing the
consolidated financial statements, income taxes
are estimated for each of the jurisdictions in
which we operate. This process involves
estimating actual current tax exposure together
with assessing temporary differences resulting
from differing treatment of items for tax and
accounting purposes. These differences result
in deferred tax assets and liabilities, which are
included on the consolidated balance sheets.
Valuation allowances may be established when
necessary to reduce deferred tax assets to the
amount expected to be realized.

Accounting for Contingencies

We are subject to various claims and
contingencies related to lawsuits, insurance,
regulatory and other matters arising out of the
normal course of business. We accrue a
liability if the likelihood of an adverse outcome
is probable and the amount is estimable. If the
likelihood of an adverse outcome is only
reasonably possible (as opposed to probable),
or if an estimate is not determinable, we
provide disclosure of a material claim or
contingency in the Notes to the Consolidated
Financial Statements.

Significant judgment is required in
evaluating our tax positions and
determining our provision for income
taxes. During the ordinary course of
business, there are many transactions and
calculations for which the ultimate tax
determination is uncertain. For example,
our effective tax rates could be adversely
affected by earnings being lower than
anticipated in jurisdictions where we have
lower statutory rates and higher than
anticipated in jurisdictions where we have
higher statutory rates, by changes in the
valuation of our deferred tax assets and
liabilities or by changes in the relevant tax,
accounting and other laws, regulations,
principles and interpretations.

Although management believes that the
income tax related judgments and estimates
are reasonable, actual results could differ
and we may be exposed to losses or gains
that could be material.

Upon income tax audit, any unfavorable tax
settlement generally would require use of
our cash and may result in an increase in
our effective income tax rate in the period
of resolution. A favorable tax settlement
may be recognized as a reduction in our
effective income tax rate in the period of
resolution.

Significant judgment is required in
evaluating our claims and contingencies,
including determining the probability that a
liability has been incurred and whether
such liability is reasonably estimable. The
estimated accruals for claims and
contingencies are made based on the best
information available, which can be highly
subjective.

Although management believes that the
contingencies related judgments and
estimates are reasonable, our accrual for
claims and contingencies could fluctuate as
additional information becomes known,
thereby creating variability in our results of
operations from period to period.
Additionally, actual results could differ and
we may be exposed to losses or gains that
could be material.

Description

Judgments and Uncertainties

Effect If Actual Results Differ
From Assumptions

Our goodwill and other indefinite-lived
intangible assets impairment loss
calculations contain uncertainties because
they require management to make
assumptions in the qualitative assessment
of relevant events and circumstances and
estimating the fair value of our reporting
units and indefinite-lived intangible assets,
including estimating future cash flows.
These calculations contain uncertainties
because they require management to make
assumptions and to apply judgment to
estimate economic factors and the
profitability of future business operations
and if necessary, the fair value of a
reporting units’ assets and liabilities.
Further, our ability to realize the future
cash flows used in our fair value
calculations is affected by factors such as
changes in economic conditions, changes
in our operating performance and changes
in our business strategies.

We do not believe there is a reasonable
likelihood that there will be a material
change in the future estimates or
assumptions we use to test for impairment
losses on goodwill and other indefinite-
lived intangible assets. Based on the results
of our annual impairment test for goodwill
and other indefinite-lived intangible assets,
no impairment was recorded. We believe
based on our assessment discussed above
our goodwill and other indefinite-lived
intangible assets are not at risk of
impairment. However, if actual results are
not consistent with our estimates or
assumptions or there are significant changes
in any of these estimates, projections and
assumptions it could have a material effect
on the fair value of these assets in future
measurement periods and result in an
impairment which could materially affect
our results of operations.

Our future incentive payments calculation
contains uncertainties because it requires
management to make assumptions and to
apply judgment to estimate future Blue
Tomato performance, including forecasting
future sales, gross profit, operating
expenses, number of new stores and capital
expenditures.

Although management believes that the
judgments and estimates related to the
future incentive payments are reasonable,
actual results could differ and we may be
exposed to losses or gains that could be
material.

Goodwill and Other Indefinite-lived
Intangible Assets

We test goodwill and other indefinite-lived
intangible assets for impairment on an annual
basis, or as indicators of impairment are
present.

We have an option to first assess qualitative
factors for our goodwill impairment analysis to
determine whether it is necessary to perform
the qualitative test based on whether it is more
likely than not that the fair value of a reporting
unit is less than its carrying amount. If we
chose not to perform the quantitative test, or
we determine that it is more likely than not that
the fair value of the reporting unit is less than
the carrying amount, we perform a quantitative
two-step impairment test.

We test our indefinite-lived assets by
estimating the fair value of the asset and
comparing that to the carrying value, an
impairment loss is recorded for the amount that
carrying value exceeds the estimated fair value.
The fair value of the trade names and
trademarks is determined using the relief from
royalty method, which requires management to
make assumptions and to apply judgment,
including forecasting future sales, expenses,
discount rates and royalty rates.

Future Incentive Payments

In conjunction with our acquisition of Blue
Tomato in July 2012, there is the possibility of
future incentive payments to the sellers of Blue
Tomato in an aggregate amount of up to
22.1 million Euros ($30.1 million, using the
exchange rate as of February 2, 2013) to the
extent that certain financial metrics are met for
the fiscal year ending April 30, 2015 and the
sellers remain employed with Blue Tomato
through April 30, 2015. Of the 22.1 million
Euros future incentive payments, 17.1 million
Euros ($23.3 million) is payable in cash, while
5.0 million Euros ($6.8 million) is payable in
shares of our common stock. We estimate
future incentive payments based on internal
projections of future Blue Tomato financial
performance.

Results of Operations

The following table presents, for the periods indicated, selected items on the consolidated statements of

income as a percent of net sales:

Fiscal Year Ended

February 2,
2013

January 28,
2012

January 29,
2011

Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cost of goods sold . . . . . . . . . . . . . . . . . . . . . . . . . .

100.0%
64.0%

100.0%
63.7%

Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Selling, general and administrative expenses . . . . . .

Operating profit
. . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest and other income, net . . . . . . . . . . . . . . . . . .

Earnings before income taxes . . . . . . . . . . . . . . . . . .
Provision for income taxes . . . . . . . . . . . . . . . . . . . .

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

36.0%
25.8%

10.2%
0.3%

10.5%
4.2%

6.3%

36.3%
25.5%

10.8%
0.3%

11.1%
4.4%

6.7%

100.0%
65.0%

35.0%
27.2%

7.8%
0.3%

8.1%
3.0%

5.1%

Fiscal 2012 Results Compared With Fiscal 2011

Net Sales

Fiscal 2012 had 53 weeks versus 52 weeks in fiscal 2011. Net sales numbers for the year include this
additional week and fiscal 2012 comparable stores sales are compared to the comparable store sales for the
53 weeks ended February 4, 2012. Net sales were $669.4 million for fiscal 2012 compared to $555.9 million for
fiscal 2011, an increase of $113.5 million or 20.4%. The increase reflected a comparable store sales increase of
5.0% for fiscal 2012 as well as the net addition of 56 stores (61 new or acquired stores offset by five store
closures), which includes the acquisition of Blue Tomato during the second quarter of fiscal 2012. Included in the
results for fiscal 2012 were $28.3 million in net sales of Blue Tomato.

The 5.0% increase in comparable store sales was a result of a 2.9% increase for our comparable in-store

sales and a 31.8% increase for our comparable ecommerce sales. Total ecommerce sales represented 11.2% of
sales for fiscal 2012, compared to 7.3% of sales for fiscal 2011, and this increase was driven by the growth in
comparable ecommerce sales mentioned above and our Blue Tomato acquisition. The increase in comparable
stores sales was primarily driven by an increase in dollars per transaction, partially offset by a decline in
comparable store transactions. Dollars per transaction increased due to an increase in average unit retail, partially
offset by a decrease in units per transaction. Comparable store sales increases in men’s apparel, junior’s apparel,
footwear and hardgoods were partially offset by comparable store sales decreases in accessories and boy’s
apparel. For information as to how we define comparable store sales, see “General” above.

Gross Profit

Gross profit was $241.3 million for fiscal 2012 compared to $201.7 million for fiscal 2011, an increase of

$39.6 million, or 19.6%. As a percentage of net sales, gross profit decreased 30 basis points in fiscal 2012 to
36.0%. The decrease was primarily due to an 80 basis points increase in ecommerce fulfillment and ecommerce
shipping expenses due to ecommerce sales increasing as a percentage of total sales and a 30 basis points impact
of a $2.2 million charge recorded during fiscal 2012 related to a step-up in inventory to estimated fair value in
conjunction with our acquisition of Blue Tomato. These decreases were partially offset by a 70 basis points
impact from leveraging our store occupancy costs on a 20.4% net sales increase and 30 basis points in
distribution center efficiencies.

Selling, General and Administrative Expenses

Selling, general and administrative (“SG&A”) expenses were $172.7 million for fiscal 2012 compared to

$141.4 million for fiscal 2011, an increase of $31.3 million, or 22.1%. SG&A expenses as a percent of sales

increased by 30 basis points in fiscal 2012 to 25.8%. The increase was primarily due to a 60 basis points increase
in ecommerce corporate costs due to the growth in our ecommerce business, a 30 basis points impact of a $2.3
million charge incurred during fiscal 2012 related to the estimated future incentive payments to be paid in
conjunction with our acquisition of Blue Tomato, a 30 basis points impact of the $1.9 million in transaction costs
incurred during fiscal 2012 in conjunction with our acquisition of Blue Tomato and a 20 basis points impact of
$1.3 million in amortization of intangible assets acquired as part of our Blue Tomato acquisition. These increases
were partially offset by 90 basis points in store operating efficiencies and a 30 basis points decrease in incentive
compensation.

Net Income

Net income for fiscal 2012 was $42.2 million, or $1.35 per diluted share, compared with net income of
$37.4 million, or $1.20 per diluted share, for fiscal 2011. Our effective income tax rate for fiscal 2012 was 40.0%
compared to 39.5% for fiscal 2011. Our effective tax rate for fiscal 2012 was adversely impacted by the tax
effects of the acquisition of Blue Tomato.

Fiscal 2011 Results Compared With Fiscal 2010

Net Sales

Net sales were $555.9 million for fiscal 2011 compared to $478.8 million for fiscal 2010, an increase of
$77.1 million or 16.1%. The increase reflected a comparable store sales increase of 8.7% for fiscal 2011 as well
as the net addition of 44 stores (45 new stores offset by one store closure) in fiscal 2011.

The 8.7% increase in comparable store sales was a result of a 5.3% increase for our comparable in-store

sales and an 80.1% increase for our comparable ecommerce sales. Total ecommerce sales represented 7.3% of
sales for fiscal 2011, compared to 4.7% of sales for fiscal 2010, and this increase was driven by the growth in
comparable ecommerce sales mentioned above. The increase in comparable stores sales was primarily driven by
an increase in dollars per transaction, partially offset by a decline in comparable store transactions. Dollars per
transaction increased due to an increase in average unit retail, partially offset by a decrease in units per
transaction. Comparable store sales increases in footwear, men’s apparel, accessories and junior’s apparel were
partially offset by comparable store sales decreases in hardgoods and boy’s apparel. For information as to how
we define comparable store sales, see “General” above.

Gross Profit

Gross profit was $201.7 million for fiscal 2011 compared to $167.8 million for fiscal 2010, an increase of

$33.9 million, or 20.2%. As a percentage of net sales, gross profit increased 130 basis points in fiscal 2011 to
36.3%. The increase was primarily due to a 50 basis points impact of the exit costs and other charges of
$2.4 million incurred in fiscal 2010 related to the relocation of our distribution center, 50 basis points due to
leveraging our store occupancy costs on a 16.1% net sales increase, 30 basis points in distribution center
efficiencies and product margin improvement of 20 basis points, partially offset by a 30 basis points increase in
ecommerce shipping costs due to the growth of the ecommerce business.

Selling, General and Administrative Expenses

SG&A expenses were $141.4 million for fiscal 2011 compared to $130.5 million for fiscal 2010, an increase

of $10.9 million, or 8.4%. SG&A expenses as a percent of sales decreased by 170 basis points in fiscal 2011 to
25.5%. The primary contributors to this decrease were 120 basis points due to store operating expense
efficiencies, a 40 basis points impact of a litigation settlement charge of $2.1 million incurred in fiscal 2010 and
a 60 basis points decrease in corporate costs, partially offset by an increase in ecommerce operating expenses as
a percent of total sales of 30 basis points due to the growth of the ecommerce business.

Net Income

Net income for fiscal 2011 was $37.4 million, or $1.20 per diluted share, compared with net income of
$24.2 million, or $0.79 per diluted share, for fiscal 2010. Our effective income tax rate for fiscal 2011 was 39.5%
compared to 37.7% for fiscal 2010.

Seasonality and Quarterly Results

As is the case with many retailers of apparel and related merchandise, our business is subject to seasonal

influences. As a result, we have historically experienced, and expect to continue to experience, seasonal and
quarterly fluctuations in our net sales and operating results. Our net sales and operating results are typically lower
in the first and second quarters of our fiscal year, while the back-to-school and winter holiday periods in our third
and fourth fiscal quarters historically have accounted for the largest percentage of our annual net sales. Quarterly
results of operations may also fluctuate significantly as a result of a variety of factors, including the timing of
store openings and the relative proportion of our new stores to mature stores, fashion trends and changes in
consumer preferences, calendar shifts of holiday or seasonal periods, changes in merchandise mix, timing of
promotional events, general economic conditions, competition and weather conditions.

The following table sets forth selected unaudited quarterly consolidated statements of income data for the

last two fiscal years. The unaudited quarterly information has been prepared on a basis consistent with the
audited consolidated financial statements included elsewhere herein and includes all adjustments that we
consider necessary for a fair presentation of the information shown. This information should be read in
conjunction with our audited consolidated financial statements and the notes thereto. The operating results for
any fiscal quarter are not indicative of the operating results for a full fiscal year or for any future period and there
can be no assurance that any trend reflected in such results will continue in the future.

Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Basic earnings per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted earnings per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Number of stores open at the end of the period . . . . . . . . . . . . . . .
Comparable store sales increase (decrease) . . . . . . . . . . . . . . . . . .

Fiscal Year Ended February 2, 2013 (1)

First
Quarter

Second
Quarter

Third
Quarter

Fourth
Quarter

(in thousands, except stores and per share data)

$129,899
$ 42,101
7,262
$
4,527
$
0.15
$
0.14
$
455
12.9%

$135,066
$ 46,425
3,778
$
2,086
$
0.07
$
0.07
$
479
9.5%

$180,023
$ 67,075
$ 21,401
$ 12,667
0.41
$
0.40
$
495
3.7%

$224,405
$ 85,683
$ 36,101
$ 22,884
0.75
$
0.74
$
500
(1.0%)

Fiscal Year Ended January 28, 2012 (2)

First
Quarter

Second
Quarter

Third
Quarter

Fourth
Quarter

(in thousands, except stores and per share data)

$105,851
$ 33,190
2,552
$
1,886
$
0.06
$
0.06
$
408
12.6%

$112,213
$ 37,062
3,550
$
2,591
$
0.08
$
0.08
$
424
7.5%

$153,951
$ 59,921
$ 22,817
$ 14,137
0.46
$
0.45
$
442
6.0%

$183,859
$ 71,503
$ 31,313
$ 18,737
0.61
$
0.60
$
444
9.7%

(1) The quarters in the fiscal year ended February 2, 2013 are 13 week periods ended April 28, 2012, July 28,

2012 and October 27, 2012 and a 14 week period ended February 2, 2013.

(2) All quarters in the fiscal year ended January 28, 2012 are 13 week periods ended April 30, 2011, July 30,

2011, October 29, 2011 and January 28, 2012.

Liquidity and Capital Resources

Our primary uses of cash are for operational expenditures, inventory purchases and capital investments,
including new stores, store remodels, store relocations, store fixtures and ongoing infrastructure improvements.
Additionally, we may use cash for the repurchase of our common stock. Historically, our main source of liquidity
has been cash flows from operations.

The significant components of our working capital are inventory and liquid assets such as cash, cash
equivalents, current marketable securities and receivables, reduced by accounts payable and accrued expenses.
Our working capital position benefits from the fact that we generally collect cash from sales to customers the
same day or within several days of the related sale, while we typically have longer payment terms with our
vendors.

At February 2, 2013 and January 28, 2012, cash, cash equivalents and current marketable securities were

$103.2 million and $172.8 million. Working capital, the excess of current assets over current liabilities, was
$146.1 million at the end of fiscal 2012, a decrease of 26.2% from $197.9 million at the end of fiscal 2011. The
decrease in cash, cash equivalents and current marketable securities and working capital in fiscal 2012 were due
primarily to the costs associated with the acquisition of Blue Tomato for $69.7 (net of cash acquired), capital
expenditures of $41.1 million due primarily to the opening of 53 new stores in fiscal 2012 and the construction of
our new home office building in Lynnwood, Washington and the $25.2 million repurchase of common stock,
partially offset by cash provided by operating activities of $66.2 million.

The following table summarizes our cash flows from operating, investing and financing activities for each

of the past three fiscal years (in thousands):

Fiscal Year Ended

February 2,
2013

January 28,
2012

January 29,
2011

Total cash provided by (used in)

Operating activities . . . . . . . . . . . . . . . . . . . . . .
Investing activities . . . . . . . . . . . . . . . . . . . . . .
Financing activities . . . . . . . . . . . . . . . . . . . . . .

$ 66,225
(41,079)
(22,519)

$ 68,065
(68,074)
3,415

$ 48,455
(43,774)
5,108

Effect of exchange rate changes on cash and cash

equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

173

—

Increase in cash and cash equivalents . . . . . . . . . . . .

$ 2,800

$ 3,422

$ 9,789

Operating Activities

Net cash provided by operating activities decreased by $1.9 million in fiscal 2012 to $66.2 million from
$68.1 million in fiscal 2011. Net cash provided by operating activities increased by $19.6 million in fiscal 2011
to $68.1 million from $48.5 million in fiscal 2010. Our operating cash flows result primarily from cash received
from our customers, offset by cash payments we make for inventory, employee compensation, store occupancy
expenses and other operational expenditures. Cash received from our customers generally corresponds to our net
sales. Because our customers primarily use credit cards or cash to buy from us, our receivables from customers
settle quickly. Changes to our operating cash flows have historically been driven primarily by changes in
operating income, which is impacted by changes to non-cash items such as depreciation, amortization and
accretion, deferred taxes, excess tax benefit from stock-based compensation and changes to the components of
working capital.

Investing Activities

Net cash used in investing activities was $41.1 million in fiscal 2012 primarily related to $69.7 million cash
paid (net of cash acquired) for the acquisition of Blue Tomato and $41.1 million of capital expenditures primarily
for new store openings, existing store remodels or relocations and the construction of our new home office
building in Lynnwood, Washington, partially offset by $70.7 million in net sales of marketable securities. Net
cash used in investing activities was $68.1 million in fiscal 2011 primarily related to net purchases of marketable
securities of $42.6 million and capital expenditures of $25.5 million for new store openings and existing store
remodels or relocations. Net cash used in investing activities was $43.8 million in fiscal 2010 primarily related to
capital expenditures of $29.1 million for new store openings, existing store remodels or relocations and the
purchase of our new distribution center in Corona, California and net purchases of marketable securities of $14.7
million.

Financing Activities

Net cash used in financing activities in fiscal 2012 was $22.5 million, primarily related to $25.2 million cash

paid for the repurchase of common stock, partially offset by proceeds from stock-based compensation exercises
and related tax benefits of $3.0 million. Net cash provided by financing activities in fiscal 2011 and 2010 was
$3.4 million and $5.1 million related to proceeds from stock-based compensation exercises and related tax
benefits.

Sources of Liquidity

Our most significant sources of liquidity continue to be funds generated by operating activities, available

cash, cash equivalents and current marketable securities. We expect these sources of liquidity and available
borrowings under our revolving credit facility will be sufficient to meet our foreseeable cash requirements for
operations and planned capital expenditures for at least the next twelve months. Beyond this time frame, if cash
flows from operations and borrowings under our revolving credit facility are not sufficient to meet our capital
requirements, then we will be required to obtain additional equity or debt financing in the future. However, there
can be no assurance that equity or debt financing will be available to us when we need it or, if available, that the
terms will be satisfactory to us and not dilutive to our then-current shareholders.

Additionally, in conjunction with our acquisition of Blue Tomato, we assumed $2.3 million in long-term

debt, which relates to amounts borrowed to fund operations. At February 2, 2013, the amount of borrowings
under this debt was $2.3 million.

Capital Expenditures

Our capital requirements include construction and fixture costs related to the opening of new stores and
remodel and relocation expenditures for existing stores. Future capital requirements will depend on many factors,
including the pace of new store openings, the availability of suitable locations for new stores and the nature of

arrangements negotiated with landlords. In that regard, our net investment to open a new store has varied
significantly in the past due to a number of factors, including the geographic location and size of the new store,
and is likely to vary significantly in the future.

During fiscal 2012, we spent $41.1 million on capital expenditures, which consisted of $28.7 million of
costs related to investment in 53 new stores and 19 remodeled or relocated stores, $9.8 million of costs associated
with the construction of our new home office building in Lynnwood, Washington and $2.6 million in other
improvements.

During fiscal 2011, we spent $25.5 million on capital expenditures, which consisted of $21.2 million of
costs related to investment in 45 new stores and 11 remodeled or relocated stores, $2.4 million of costs associated
with the construction of our new home office building in Lynnwood, Washington and $1.9 million in other
improvements.

During fiscal 2010, we spent $29.1 million on capital expenditures, which consisted of $9.7 million related
to investment in 27 new stores and three remodeled or relocated stores, the acquisition and build-out costs of our
new distribution center in Corona, California of $12.9 million, the acquisition costs of $3.2 million for land for
our new home office in Lynnwood, Washington and $3.3 million in other improvements.

In fiscal 2013, we expect to spend approximately $42 million to $44 million on capital expenditures, a

majority of which will relate to leasehold improvements and fixtures for the approximately 60 new stores we
plan to open in fiscal 2013 and remodels or relocations of existing stores. There can be no assurance that the
number of stores that we actually open in fiscal 2013 will not be different from the number of stores we plan to
open, or that actual fiscal 2013 capital expenditures will not differ from this expected amount.

Contractual Obligations and Commercial Commitments

There were no material changes outside the ordinary course of business in our contractual obligations during

the fiscal year ended February 2, 2013, with the exception of the long-term debt that we assumed in conjunction
with the acquisition of Blue Tomato. The following table summarizes the total amount of future payments due
under our contractual obligations at February 2, 2013 (in thousands):

Total

Fiscal 2013

Fiscal 2014 and
Fiscal 2015

Fiscal 2016 and
Fiscal 2017

Thereafter

Operating lease obligations (1) . . $485,627 $ 65,932
. . . . . . . 120,353 120,353
Purchase obligations (2)
358
2,421
Debt obligations (3) . . . . . . . . . . .

$132,031

$117,391

$170,273

—
716

—
532

—
815

Total (4) . . . . . . . . . . . . . . . . . . . . $608,401 $186,643

$132,747

$117,923

$171,088

(1) Amounts do not include percentage rent, real estate taxes, insurance or common area maintenance charges

unless these costs are fixed and determinable.

(2) We have an option to cancel these commitments with no notice prior to shipment, except for private label
purchase orders in which we are obligated to repay certain contractual amounts upon cancellation.
(3) Amounts include debt principal and scheduled interest payments on our long-term debt assumed in

conjunction with our acquisition of Blue Tomato.

(4) The table above excludes the potential future incentive payments to the sellers of Blue Tomato in an

aggregate amount of up to 22.1 million Euros ($30.1 million, using the exchange rate as of February 2,
2013) to the extent that certain financial metrics are met and the sellers remain employed with Blue Tomato
through April 2015. At February 2, 2013, we estimated that we will be obligated for future incentive
payments of 9.0 million Euros ($12.3 million). See Note 4, “Business Combinations,” in the Notes to
Consolidated Financial Statements found in Part IV Item 15 of the Form 10-K, for additional information
related to the future incentive payments.

Off-Balance Sheet Obligations

At February 2, 2013, we did not have any off-balance sheet arrangements, as defined in Item 303(a)(4)(ii) of

Regulation S-K.

Impact of Inflation/Deflation

We do not believe that inflation has had a material impact on our net sales or operating results for the past

three fiscal years. However, substantial increases in costs, including the price of raw materials, labor, energy and
other inputs used in the production of our merchandise, could have a significant impact on our business and the
industry in the future. Additionally, while deflation could positively impact our merchandise costs, it could have
an adverse effect on our average unit retail price, resulting in lower sales and operating results.

Recent Accounting Pronouncements

See Note 3, “Recent Accounting Pronouncements,” in the Notes to Consolidated Financial Statements found

in Part IV Item 15 of this Form 10-K.

Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk

Our earnings are affected by changes in market interest rates as a result of our short-term and long-term

marketable securities, which are primarily invested in state and local municipal securities, corporate debt
securities and variable-rate demand notes, which have long-term nominal maturity dates but feature variable
interest rates that reset at short-term intervals. If our current portfolio average yield rate decreased by 10% in
fiscal 2012, our net income would have decreased by $0.1 million. This amount is determined by considering the
impact of the hypothetical yield rates on our cash, cash equivalents, short-term and long-term marketable
securities balances and assumes no changes in our investment structure.

During different times of the year, due to the seasonality of our business, we may borrow under our
revolving credit facility. To the extent we borrow under our revolving credit facility, which bears interest at the
Daily One Month LIBOR rate plus 1.00%, we are exposed to market risk related to changes in interest rates. At
February 2, 2013, we had no borrowings outstanding under our secured revolving credit facility. At February 2,
2013, we had a long-term debt obligation of $2.3 million, which we assumed in conjunction with our acquisition
of Blue Tomato.

Foreign Exchange Rate Risk

Our international subsidiaries operate with functional currencies other than the U.S. dollar. Therefore, we
must translate revenues, expenses, assets and liabilities from functional currencies into U.S. dollars at exchange
rates in effect during, or at the end of, the reporting period. The fluctuation in the value of the U.S. dollar against
other currencies affects the reported amounts of revenues, expenses, assets and liabilities. As we expand our
international operations, our exposure to exchange rate fluctuations will increase.

Item 8.

CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Information with respect to this item is set forth in “Index to the Consolidated Financial Statements,” found

in Part IV Item 15 of this Form 10-K.

Item 9.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

None.

Item 9A. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures. We carried out an evaluation, under the supervision and

with the participation of our management, including our Chief Executive Officer (“CEO”) and Chief Financial
Officer (“CFO”), of the effectiveness of the design and operation of our disclosure controls and procedures (as
defined in Securities Exchange Act Rule 13a-15(e)). Based on this evaluation, our CEO and CFO concluded that,
as of February 2, 2013, our disclosure controls and procedures were effective.

Changes in Internal Control Over Financial Reporting. There has been no change in our internal control

over financial reporting (as defined in Securities Exchange Act Rule 13a-15(f)) during the quarter ended
February 2, 2013 that has materially affected, or is reasonably likely to materially affect, our internal control over
financial reporting.

Management’s Annual Report on Internal Control Over Financial Reporting. The management of Zumiez

Inc. (the “Company”) is responsible for establishing and maintaining adequate internal control over financial
reporting, as defined in Rule 13a-15(f) of the Securities Exchange Act of 1934. The Company’s internal control
over financial reporting is a process designed to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles.

This process includes policies and procedures that: (i) pertain to the maintenance of records that, in

reasonable detail, accurately and fairly reflect the transactions of the Company; (ii) provide reasonable assurance
that transactions are recorded as necessary to permit preparation of financial statements in accordance with
generally accepted accounting principles, and that receipts and expenditures of the Company are being made only
in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the
Company’s assets that could have a material effect on the financial statements. Because of its inherent
limitations, internal control over financial reporting may not prevent or detect misstatements, and can provide
only reasonable, not absolute, assurance that the objectives of the control system are met. Furthermore, because
of changes in conditions, the effectiveness of internal control may vary over time.

The Company’s management, with the participation of the Chief Executive Officer and Chief Financial

Officer, assessed the effectiveness of the Company’s internal control over financial reporting as of February 2,
2013. Management’s assessment was based on criteria described in the Internal Control—Integrated Framework
issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). On July 4, 2012,
the Company completed the acquisition of Snowboard Dachstein Tauern GmbH and Blue Tomato Graz Handel
GmbH (collectively, “Blue Tomato”). As permitted by applicable guidelines established by the Securities and
Exchange Commission, the Company’s management excluded Blue Tomato’s operations from its assessment of
internal control over financial reporting as of February 2, 2013. Blue Tomato’s operations represented 7% of the
Company’s consolidated total assets, excluding goodwill and intangible assets, net, and 4% of the Company’s
consolidated net sales as of and for the year ended February 2, 2013. Based on management’s assessment and
those criteria, the Company’s management concluded that the Company’s internal control over financial
reporting was effective as of February 2, 2013.

The effectiveness of the Company’s internal control over financial reporting as of February 2, 2013 has been

audited by Moss Adams LLP, the Company’s independent registered public accounting firm, as stated in their
report, which appears herein.

Item 9B. OTHER INFORMATION

None.

PART III

Item 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Information regarding our directors and nominees for directorship is presented under the headings “Election

of Directors,” in our definitive proxy statement for use in connection with our 2013 Annual Meeting of
Shareholders (the “Proxy Statement”) that will be filed within 120 days after our fiscal year ended February 2,
2013 and is incorporated herein by this reference thereto. Information concerning our executive officers is set
forth under the heading “Executive Officers” in our Proxy Statement, and is incorporated herein by reference
thereto. Information regarding compliance with Section 16(a) of the Exchange Act, our code of conduct and
ethics and certain information related to the Company’s Audit Committee, Compensation Committee and
Governance Committee is set forth under the heading “Corporate Governance” in our Proxy Statement, and is
incorporated herein by reference thereto.

Item 11. EXECUTIVE COMPENSATION

Information regarding the compensation of our directors and executive officers and certain information
related to the Company’s Compensation Committee is set forth under the headings “Executive Compensation,”
“Director Compensation,” “Compensation Discussion and Analysis,” “Report of the Compensation Committee of
the Board of Directors” and “Compensation Committee Interlocks and Insider Participation” in our Proxy
Statement, and is incorporated herein by this reference thereto.

Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS, AND MANAGEMENT

AND RELATED SHAREHOLDER MATTERS

Information with respect to security ownership of certain beneficial owners and management is set forth

under the headings “Security Ownership of Certain Beneficial Owners and Management” and “Equity
Compensation Plan Information” in our Proxy Statement, and is incorporated herein by this reference thereto.

Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR

INDEPENDENCE

Information regarding certain relationships and related transactions and director independence is presented
under the heading “Corporate Governance” in our Proxy Statement, and is incorporated herein by this reference
thereto.

Item 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Information concerning principal accounting fees and services is presented under the heading “Fees Paid to
Independent Registered Public Accounting Firm for Fiscal Years 2012 and 2011” in our Proxy Statement, and is
incorporated herein by this reference thereto.

PART IV

Item 15. EXHIBITS AND CONSOLIDATED FINANCIAL STATEMENTS

(a)(1) Consolidated Financial Statements

(2) Consolidated Financial Statement Schedules:

All financial statement schedules are omitted because the required information is presented either in the
consolidated financial statements or notes thereto, or is not applicable, required or material.

(3) Exhibits included or incorporated herein:

See Exhibit Index.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Reports of Independent Registered Public Accounting Firm . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Balance Sheets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Comprehensive Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Changes in Shareholders’ Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

46
48
49
50
51
52
53

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders
Zumiez Inc.

We have audited Zumiez Inc.’s (the “Company”) internal control over financial reporting as of February 2, 2013,
based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission. As discussed in Management’s Annual Report on Internal Control
Over Financial Reporting, on July 4, 2012, the Company acquired Snowboard Dachstein Tauern GmbH and Blue
Tomato Graz Handel GmbH (collectively, “Blue Tomato”). For the purposes of assessing internal control over
financial reporting, management excluded Blue Tomato, whose financial statements constitute 7% of the
Company’s consolidated total assets (excluding $71.7 million of goodwill and intangible assets, which were
integrated into the Company’s control environment) and 4% of consolidated net sales as of and for the year ended
February 2, 2013. Accordingly, our audit did not include the internal control over financial reporting of Blue
Tomato. The Company’s management is responsible for maintaining effective internal control over financial
reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the
accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to
express an opinion on the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board
(United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether effective internal control over financial reporting was maintained in all material respects. Our audit
included obtaining an understanding of internal control over financial reporting, assessing the risk that a material
weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on
the assessed risk. Our audit also included performing such other procedures as we considered necessary in the
circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. A company’s internal control over financial reporting
includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance
with generally accepted accounting principles, and that receipts and expenditures of the company are being made
only in accordance with authorizations of management and directors of the company; and (3) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the
company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.

In our opinion, Zumiez Inc. maintained, in all material respects, effective internal control over financial reporting
as of February 2, 2013, based on criteria established in Internal Control—Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board
(United States), the consolidated balance sheets of Zumiez Inc. as of February 2, 2013 and January 28, 2012, and
the consolidated statements of income, comprehensive income, changes in shareholders’ equity, and cash flows
for the three fiscal years in the period ended February 2, 2013, and our report dated March 19, 2013 expressed an
unqualified opinion on those consolidated financial statements.

/s/ Moss Adams LLP

Seattle, Washington
March 19, 2013

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Shareholders
Zumiez Inc.

We have audited the accompanying consolidated balance sheets of Zumiez Inc. (the “Company”) as of
February 2, 2013 and January 28, 2012, and the related consolidated statements of income, comprehensive
income, changes in shareholders’ equity and cash flows for each of the three years in the period ended
February 2, 2013. These consolidated financial statements are the responsibility of the Company’s management.
Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board
(United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether the consolidated financial statements are free of material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit
also includes assessing the accounting principles used and significant estimates made by management, as well as
evaluating the overall consolidated financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the
consolidated financial position of Zumiez Inc. as of February 2, 2013 and January 28, 2012 and the consolidated
results of its operations and its cash flows for each of the three years in the period ended February 2, 2013, in
conformity with generally accepted accounting principles in the United States of America.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board
(United States), Zumiez Inc.’s internal control over financial reporting as of February 2, 2013, based on criteria
established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of
the Treadway Commission and our report dated March 19, 2013 expressed an unqualified opinion thereon.

/s/ Moss Adams LLP

Seattle, Washington
March 19, 2013

ZUMIEZ INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)

February 2,
2013

January 28,
2012

Assets

Current assets
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Marketable securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prepaid expenses and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fixed assets, net
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intangible assets, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 17,579
85,593
9,467
77,598
9,192
3,885

203,314
115,474
64,576
20,480
5,254

$ 14,779
158,019
6,284
65,037
7,907
1,477

253,503
89,478
13,154
—
6,022

Total long-term assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

205,784
$409,098

108,654
$362,157

Liabilities and Shareholders’ Equity

Current liabilities
Trade accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued payroll and payroll taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred rent and tenant allowances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 16,052
11,057
6,957
4,901
18,232

$ 21,743
9,062
5,835
4,230
14,706

Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term deferred rent and tenant allowances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term debt and other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total long-term liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

57,199
36,928
5,544
6,006

48,478

Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

105,677

55,576
32,321
—
1,983

34,304

89,880

Commitments and contingencies (Note 11)
Shareholders’ equity
Preferred stock, no par value, 20,000 shares authorized; none issued and outstanding . . .
Common stock, no par value, 50,000 shares authorized; 30,114 shares issued and
outstanding at February 2, 2013 and 31,170 shares issued and outstanding at
January 28, 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated other comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

—

108,360
6,010
189,051

99,412
135
172,730

Total shareholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

303,421

272,277

Total liabilities and shareholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$409,098

$362,157

See accompanying notes to consolidated financial statements

ZUMIEZ INC.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)

February 2,
2013

Fiscal Year Ended
January 28,
2012

January 29,
2011

Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cost of goods sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$669,393
428,109

$555,874
354,198

$478,849
311,028

Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Selling, general and administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . .

241,284
172,742

201,676
141,444

167,821
130,454

Operating profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest income, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other income (expense), net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Earnings before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision for income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

68,542
1,410
327

70,279
28,115

60,232
1,836
(379)

61,689
24,338

37,367
1,496
(8)

38,855
14,652

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 42,164

$ 37,351

$ 24,203

Basic earnings per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Diluted earnings per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1.37

1.35

1.22

1.20

0.81

0.79

Weighted average shares used in computation of earnings per share:

Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

30,742
31,273

30,527
31,119

29,971
30,794

See accompanying notes to consolidated financial statements

ZUMIEZ INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands)

February 2,
2013

Fiscal Year Ended
January 28,
2012

January 29,
2011

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other comprehensive income (loss), net of tax and reclassification

$42,164

$37,351

$24,203

adjustments:

Foreign currency translation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net change in unrealized (loss) gain on available-for-sale

investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other comprehensive income (loss), net

. . . . . . . . . . . . . . . . . . . . . . . . . . . .

6,040

(19)

—

(165)

5,875

171

152

(118)

Comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$48,039

$37,503

$24,085

See accompanying notes to consolidated financial statements

ZUMIEZ INC.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
(In thousands)

Common Stock

Accumulated
Other
Comprehensive

Amount

Income (Loss)

Retained
Earnings

Total

Balance at January 30, 2010 . . . . . . . . . . . . . . . . . .

30,251

$ 81,399

$ 101

$111,176

$192,676

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other comprehensive loss, net . . . . . . . . . . . . . . . . . .
Issuance and exercise of stock-based compensation,
including tax benefit of $3,248 . . . . . . . . . . . . . . .
Stock-based compensation expense . . . . . . . . . . . . . .

—
—

584
—

—
—

5,108
4,866

Balance at January 29, 2011 . . . . . . . . . . . . . . . . . .

30,835

91,373

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other comprehensive income, net . . . . . . . . . . . . . . .
Issuance and exercise of stock-based compensation,
including tax benefit of $1,826 . . . . . . . . . . . . . . .
Stock-based compensation expense . . . . . . . . . . . . . .

—
—

335
—

—
—

2,736
5,303

Balance at January 28, 2012 . . . . . . . . . . . . . . . . . .

31,170

99,412

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other comprehensive income, net . . . . . . . . . . . . . . .
Issuance and exercise of stock-based compensation,
including tax benefit of $2,094 . . . . . . . . . . . . . . .
Stock-based compensation expense . . . . . . . . . . . . . .
Repurchase of common stock . . . . . . . . . . . . . . . . . .

—
—

209
—
(1,265)

—
—

2,952
5,996
—

—
(118)

24,203
—

24,203
(118)

—
—

(17)

—
152

—
—

135

—
5,875

—
—
—

—
—

5,108
4,866

135,379

226,735

37,351
—

37,351
152

—
—

2,736
5,303

172,730

272,277

42,164
—

42,164
5,875

—
—
(25,843)

2,952
5,996
(25,843)

Balance at February 2, 2013 . . . . . . . . . . . . . . . . . .

30,114

$108,360

$6,010

$189,051

$303,421

See accompanying notes to consolidated financial statements

ZUMIEZ INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)

Cash flows from operating activities:
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustments to reconcile net income to net cash provided by operating

activities:

Depreciation, amortization and accretion . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stock-based compensation expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Excess tax benefit from stock-based compensation . . . . . . . . . . . . . . . . . . . .
Lease termination costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Changes in operating assets and liabilities:
Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prepaid expenses and other
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trade accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued payroll and payroll taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred rent and tenant allowances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Fiscal Year Ended

February 2,
2013

January 28,
2012

January 29,
2011

$ 42,164

$ 37,351

$ 24,203

22,957
(1,630)
5,996
(2,094)
1,397
389

(2,568)
(2,987)
(1,125)
(5,626)
1,207
1,843
5,469
833

19,744
3,441
5,303
(1,826)
—
608

(671)
(8,833)
(607)
4,295
1,485
2,868
5,334
(427)

17,923
537
4,866
(3,248)
—
458

(998)
(5,387)
(1,137)
(52)
987
3,350
1,838
5,115

Net cash provided by operating activities . . . . . . . . . . . . . . . . . . . . . . . . .

66,225

68,065

48,455

Cash flows from investing activities:
Additions to fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Acquisitions, net of cash acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchases of marketable securities and other investments . . . . . . . . . . . . . .
Sales and maturities of marketable securities and other investments . . . . . .

(41,070)
(70,711)
(121,003)
191,705

(25,508)
—

(194,531)
151,965

(29,124)
—

(179,611)
164,961

Net cash used in investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(41,079)

(68,074)

(43,774)

Cash flows from financing activities:
Payments on long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Repurchase of common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from exercise of stock-based compensation, net of withholding

tax payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Excess tax benefit from stock-based compensation . . . . . . . . . . . . . . . . . . . .

(258)
(25,213)

—
—

858
2,094

Net cash (used in) provided by financing activities . . . . . . . . . . . . . . . . . .

(22,519)

Effect of exchange rate changes on cash and cash equivalents . . . . . . . .
Net increase in cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . .
Cash and cash equivalents, beginning of period . . . . . . . . . . . . . . . . . . . .

173
2,800
14,779

—
—

1,860
3,248

5,108

—
9,789
1,568

1,589
1,826

3,415

16
3,422
11,357

Cash and cash equivalents, end of period . . . . . . . . . . . . . . . . . . . . . . . . .

$ 17,579

$ 14,779

$ 11,357

Supplemental disclosure on cash flow information:
Cash paid during the period for income taxes . . . . . . . . . . . . . . . . . . . . . . . .
Accrual for purchases of fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrual for repurchase of common stock . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 27,840
1,942
630

$ 18,014
3,083
—

$ 10,789
469
—

See accompanying notes to consolidated financial statements

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Nature of Business and Basis of Presentation

Nature of Business—Zumiez Inc. (the “Company,” “we,” “us,” “its” and “our”) is a leading multi-channel

specialty retailer of action sports related apparel, footwear, accessories and hardgoods, focusing on
skateboarding, snowboarding, surfing, motocross and bicycle motocross (“BMX”) for young men and women. At
February 2, 2013, we operated 500 stores; 472 in the United States (“U.S.”), 20 in Canada and eight in Europe.
We operate under the names Zumiez and Blue Tomato. Additionally, we operate ecommerce websites at
www.zumiez.com and www.blue-tomato.com. We completed the acquisition of Snowboard Dachstein Tauern
GmbH and Blue Tomato Graz Handel GmbH (collectively, “Blue Tomato”) during the fiscal year ended
February 2, 2013. Blue Tomato is a multi-channel retailer for board sports and related apparel and footwear that
operates primarily in the European marketplace.

Fiscal Year—We use a fiscal calendar widely used by the retail industry that results in a fiscal year
consisting of a 52- or 53-week period ending on the Saturday closest to January 31. Each fiscal year consists of
four 13-week quarters, with an extra week added to the fourth quarter every five or six years. Fiscal 2012 was a
53-week period ending February 2, 2013. Fiscal 2011 was a 52-week period ending January 28, 2012. Fiscal
2010 was a 52-week period ended January 29, 2011.

Basis of Presentation—The accompanying consolidated financial statements have been prepared in
accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”). The
consolidated financial statements include the accounts of Zumiez Inc. and its wholly-owned subsidiaries. All
significant intercompany transactions and balances are eliminated in consolidation.

2. Summary of Significant Accounting Policies

Use of Estimates—The preparation of consolidated financial statements in conformity with U.S. GAAP
requires estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of
contingent assets and liabilities at the date of the consolidated financial statements as well as the reported
amounts of revenues and expenses during the reporting period. These estimates can also affect supplemental
information disclosed by us, including information about contingencies, risk and financial condition. Actual
results could differ from these estimates and assumptions.

Fair Value of Financial Instruments—We disclose the estimated fair value of our financial instruments.
Financial instruments are generally defined as cash, evidence of ownership interest in an entity or a contractual
obligation that both conveys to one entity a right to receive cash or other financial instruments from another
entity and imposes on the other entity the obligation to deliver cash or other financial instruments to the first
entity. Our financial instruments, other than those presented in Note 12, “Fair Value Measurements,” include
cash and cash equivalents, receivables, payables and other liabilities. The carrying amounts of cash and cash
equivalents, receivables, payables and other liabilities approximate fair value because of the short-term nature of
these instruments.

Cash and Cash Equivalents—We consider all highly liquid investments with original maturity of three

months or less when purchased to be cash equivalents.

Concentration of Risk—We maintain our cash and cash equivalents in accounts with major financial

institutions in the form of demand deposits, money market accounts and state and local municipal securities.
Deposits in these financial institutions may exceed the amount of federal deposit insurance provided on such
deposits. We have not experienced any losses on our deposits of cash and cash equivalents.

Marketable Securities—Our marketable securities primarily consist of state and local municipal securities,

corporate debt securities and variable-rate demand notes. Variable-rate demand notes are considered highly

liquid. Although the variable-rate demand notes have long-term nominal maturity dates, the interest rates
generally reset weekly. Despite the long-term nature of the underlying securities of the variable-rate demand
notes, we have the ability to quickly liquidate these securities, which have an embedded put option that allows
the bondholder to sell the security at par plus accrued interest.

Generally accepted accounting principles require recording an investment impairment charge at the point we
believe an investment has experienced a decline in value that is other-than-temporary. In determining whether an
other-than-temporary impairment has occurred, we review information about the underlying investment that is
publicly available such as analyst reports, applicable industry data and other pertinent information and assess our
intent to hold the security and whether it is more likely than not we will be required to sell any investment before
recovery of its amortized cost basis. The investment would be written down to its current market value at the
time the impairment is deemed to have occurred. Future adverse changes in market conditions, continued poor
operating results of underlying investments or other factors could result in further losses that may not be reflected
in an investment’s current carrying value, possibly requiring an additional impairment charge in the future.

We use the specific identification method to determine any realized gains or losses from the sale of our

marketable securities classified as available-for-sale. Realized gains or losses from the sale of our marketable
securities classified as available-for-sale are recorded in other income (expense), net on the consolidated
statements of income.

Inventories—Merchandise inventories are valued at the lower of cost or fair market value. The cost of
merchandise inventories are based upon an average cost methodology. Merchandise inventories may include
items that have been written down to our best estimate of their net realizable value. Our decisions to write-down
our merchandise inventories are based on their current rate of sale, the age of the inventory, the profitability of
the inventory and other factors. Actual final sales prices to customers may be higher or lower than our estimated
sales prices and could result in a fluctuation in gross profit. Historically, any additional write-downs have not
been significant. We have reserved for inventory at February 2, 2013 and January 28, 2012 in the amounts of
$3.3 million and $3.2 million. The inventory reserve includes inventory whose estimated market value is below
cost and an estimate for inventory shrinkage. We estimate an inventory shrinkage reserve for anticipated losses
for the period. Shrinkage refers to a reduction in inventory due to shoplifting, employee theft and other matters.
The inventory related to these reserves is not marked up in subsequent periods.

Fixed Assets—Fixed assets primarily consist of leasehold improvements, fixtures, land, buildings,

computer equipment, software and store equipment. Fixed assets are stated at cost less accumulated depreciation
utilizing the straight-line method over the assets’ estimated useful lives. The useful lives of our major classes of
fixed assets are as follows:

Leasehold improvements
Fixtures
Computer equipment, software, store equipment & other
Buildings and building improvements

Lesser of 10 years or the term of the lease
3 to 7 years
3 to 5 years
15 to 39 years

The cost and related accumulated depreciation of assets sold or otherwise disposed of is removed from the

accounts and the related gain or loss is reported on the consolidated statements of income.

Asset Retirement Obligations—An asset retirement obligation (“ARO”) represents a legal obligation
associated with the retirement of a tangible long-lived asset that is incurred upon the acquisition, construction,
development or normal operation of that long-lived asset. Our AROs are primarily associated with leasehold
improvements that, at the end of a lease, we are contractually obligated to remove in order to comply with certain
lease agreements. The ARO balance at February 2, 2013 and January 28, 2012 is $1.9 million and $1.7 million
and is recorded in other liabilities and long-term debt and other liabilities on the consolidated balance sheets and
will be subsequently adjusted for changes in fair value. The associated estimated asset retirement costs are
capitalized as part of the carrying amount of the long-lived asset and depreciated over its useful life.

Valuation of Long-Lived Assets—We review the carrying value of long-lived assets for impairment when
factors and circumstances indicate that the carrying values may not be recoverable. Recoverability of assets to be
held and used is determined by a comparison of the carrying amount of an asset to future undiscounted net cash
flows expected to be generated by the asset. If such assets are considered impaired, the impairment recognized is
measured by comparing projected discounted cash flow of the asset to the asset carrying values. The estimation
of future cash flows from operating activities requires significant judgments of factors that include future sales,
gross profit and operating expenses. Impairment charges are included in selling, general and administrative
expenses on the consolidated statements of income. Impairment charges were immaterial for the fiscal years
ended February 2, 2013, January 28, 2012 and January 29, 2011.

Goodwill—Goodwill represents the excess of purchase price over the fair value of acquired tangible and

identifiable intangible net assets. We test goodwill for impairment on an annual basis or more frequently if
indicators of impairment are present. We perform our annual impairment measurement test in the fourth quarter.
Events that result in an impairment review include significant changes in the current business climate, future
expectations of economic conditions, declines in our operating results of our reporting units, or an expectation
that the carrying amount may not be recoverable. We have an option to test goodwill for impairment by first
performing a qualitative assessment to determine whether it is more likely than not that the fair value of the
reporting unit is less than the carrying amount. The qualitative assessment may include, but is not limited to,
weighing the relative impact of factors specific to the reporting units as well as industry and macroeconomic
factors. Reporting unit specific factors considered, include the results of the most recent impairment test, as well
as financial performance and changes to the reporting units’ carrying amounts since the most recent impairment
test. After assessing those various factors, if it is determined that it is more likely than not that the fair value of
the reporting unit is greater than the carrying amount, further testing of goodwill impairment is not required to be
performed. If it is more likely than not that the fair value of the reporting unit is less than the carrying amount or
if we chose not to perform the qualitative assessment, we perform a quantitative two-step impairment test. The
first step compares the fair value of the reporting unit with its carrying amount of net assets, including goodwill.
If the carrying amount exceeds fair value, then the second step of the impairment test is performed to measure the
amount of impairment loss, if any. The second step includes fair valuing all the tangible and intangible assets of
the reporting unit as if the reporting unit had been acquired in a business combination. Then, the implied fair
value of the reporting unit’s goodwill is compared to the carrying amount of that goodwill. If the carrying
amount of the reporting unit’s goodwill exceeds the implied fair value of the goodwill, we recognize an
impairment loss in an amount equal to the excess, not to exceed the carrying amount. The fair value of each of
our reporting units is the price a willing buyer would pay for the reporting unit and is typically calculated using a
discounted cash flow model and market multiples of current earnings. Key assumptions used in this calculation
include revenue growth, operating expenses and a discount rate that we believe a buyer would assume when
determining a purchase price for the reporting unit. Estimates of revenue growth and operating expenses are
based on internal projections considering a reporting unit’s past performance and forecasted growth, local market
economics and the local business environment impacting the reporting unit’s performance. The discount rate is
calculated using a weighted average cost of capital. These estimates are highly subjective judgments and can be
significantly impacted by changes in the business or economic conditions.

Intangible Assets—Our intangible assets consist of trade names and trademarks with indefinite lives and
certain definite-lived intangible assets. We test our indefinite-lived intangible assets for impairment on an annual
basis, or more frequently if indicators of impairment are present. In July 2012, the FASB issued guidance that
would allow us to test our indefinite-lived intangible asset for impairment by performing a qualitative assessment
to determine whether it is more likely than not that the fair value of the asset is less than the carrying amount. We
did not early adopt this guidance and it will be effective for us for the fiscal year ending February 1, 2014. We
test our indefinite-lived assets by estimating the fair value of the asset and comparing that to the carrying value,
an impairment loss is recorded for the amount that carrying value exceeds the estimated fair value. The fair value
of the trade names and trademarks is determined using the relief from royalty method, which requires
management to make assumptions and to apply judgment, including forecasting future sales, expenses, discount
rates, and royalty rates. Definite-lived intangible assets, which consist of developed technology and customer

relationships, are amortized using the straight-line method over their estimated useful lives. Additionally, we test
the definite-lived intangible assets when facts and circumstances indicate that the carrying values may not be
recoverable. An impairment loss in our definite-lived intangible assets would be recognized when the estimated
fair value of the definite-lived asset is less than its carrying value. We determine the estimated fair value of our
definite-lived asset where we take the estimated future operating cash flows derived from the operation to which
the asset relates over its remaining useful life, using a discounted cash flow analysis. Changes in any of these
estimates, projections and assumptions could have a material effect of the fair value of these assets in future
measurement periods and result in an impairment which could materially affect our results of operations.

Deferred Rent, Rent Expense and Tenant Allowances—We lease our stores and certain corporate and

other operating facilities under operating leases. A majority of our leases provide for ongoing co-tenancy
requirements or early cancellation clauses that would further lower rental rates, or permit lease terminations, or
both, in the event that co-tenants cease to operate for specific periods or if certain sales levels are not met in
specific periods. Most of the store leases require payment of a specified minimum rent and a contingent rent
based on a percentage of the store’s net sales in excess of a specified threshold. Most of the lease agreements
have defined escalating rent provisions, which are straight-lined over the term of the related lease, including any
lease renewals deemed to be probable. We recognize rent expense over the term of the lease, plus the
construction period prior to occupancy of the retail location. For certain locations, we receive tenant allowances
and report these amounts as a liability, which is amortized as a reduction to rent expense over the term of the
lease.

Claims and Contingencies—We are subject to various claims and contingencies related to lawsuits,
insurance, regulatory and other matters arising out of the normal course of business. We accrue a liability if the
likelihood of an adverse outcome is probable and the amount is estimable. If the likelihood of an adverse
outcome is only reasonably possible (as opposed to probable), or if an estimate is not determinable, we provide
disclosure of a material claim or contingency in the Notes to the Consolidated Financial Statements.

Revenue Recognition—Sales are recognized upon purchase at our retail store locations. For our
ecommerce sales, revenue is recognized upon estimated delivery to the customer. Taxes collected from our
customers are recorded on a net basis. We record the sale of gift cards as a current liability and recognize revenue
when a customer redeems a gift card. Additionally, an estimate of the portion of gift cards that is not expected to
be redeemed (“gift card breakage”) is recognized in net sales after 24 months, at which time the likelihood of
redemption is considered remote based on our historical redemption data. For the fiscal years ended February 2,
2013, January 28, 2012 and January 29, 2011, we recorded net sales related to gift card breakage income of $0.7
million, $0.6 million and $0.6 million. Revenue is recorded net of estimated and actual sales returns and
deductions for promotions. We accrue for estimated sales returns by customers based on historical sales return
results. The allowance for sales returns at February 2, 2013 and January 28, 2012 was $1.2 million and $0.9
million.

Cost of Goods Sold—Cost of goods sold consists of branded merchandise costs and our private label
merchandise costs including design, sourcing, importing and inbound freight costs. Our cost of goods sold also
includes shrinkage, buying, occupancy, ecommerce fulfillment, distribution and warehousing costs (including
associated depreciation) and freight costs for store merchandise transfers. This may not be comparable to the way
in which our competitors or other retailers compute their cost of goods sold. Cash consideration received from
vendors, is reported as a reduction of cost of goods sold if the inventory has sold, a reduction of the carrying
value of the inventory if the inventory is still on hand, or a reduction of selling, general and administrative
expense if the amounts are reimbursements of specific, incremental and identifiable costs of selling the vendors’
products.

Shipping Revenue and Costs—We include shipping revenue related to ecommerce sales in net sales and

the related freight cost is charged to cost of goods sold. For fiscal years ended February 2, 2013, January 28,
2012 and January 29, 2011, we incurred shipping costs related to ecommerce sales of $8.0 million, $4.4 million
and $2.6 million.

Selling, General and Administrative Expense—Selling, general and administrative expenses consist
primarily of store personnel wages and benefits, administrative staff and infrastructure expenses, freight costs for
merchandise shipments from the distribution centers to the stores, store supplies, depreciation on fixed assets at
the home office and stores, facility expenses and training, advertising and marketing costs. Credit card fees,
insurance, public company expenses, legal expenses, amortization of intangibles assets and other miscellaneous
operating costs are also included in selling, general and administrative expenses. This may not be comparable to
the way in which our competitors or other retailers compute their selling, general and administrative expenses.

Advertising—We expense advertising costs as incurred. Advertising expenses are net of sponsorships and
vendor reimbursements. Advertising expense was $6.0 million, $2.5 million and $1.3 million for the fiscal years
ended February 2, 2013, January 28, 2012 and January 29, 2011.

Future Incentive Payments—In conjunction with our acquisition of Blue Tomato during the fiscal year

ended February 2, 2013, there is the possibility of future incentive payments to the sellers of Blue Tomato in an
aggregate amount of up to 22.1 million Euros ($30.1 million, using the exchange rate as of February 2, 2013) to
the extent that certain financial metrics are met and the sellers remain employed with Blue Tomato through April
2015. We estimate future incentive payments based on internal projections of future Blue Tomato financial
performance.

Stock-Based Compensation—We account for stock-based compensation by recording the estimated fair

value of stock-based awards granted as compensation expense over the vesting period, net of estimated
forfeitures. Stock-based compensation expense is recognized using an accelerated method for stock options and a
straight-line basis for restricted stock. We estimate forfeitures of stock-based awards based on historical
experience and expected future activity.

The fair value of restricted stock awards is measured based on the closing fair market value of the

Company’s common stock on the date of grant. The fair value of stock option grants are estimated on the date of
grant using the Black-Scholes option pricing method based on the following subjective assumptions:

Volatility—This is a measure of the amount by which a stock price has fluctuated or is expected to fluctuate.
We use actual daily historical changes in the market value of our stock equal to the expected term of the
option. An increase in the expected volatility will increase compensation expense.

Risk-free interest rate—This is the U.S. Treasury rate as of the grant date having a term equal to the
expected term of the option. An increase in the risk-free interest rate will increase compensation expense.

Expected term—The expected term was calculated using the simplified method as allowed by the Securities
and Exchange Commission. Under this method, the expected term is equal to the sum of the weighted
average vesting term plus the original contractual term divided by two. We have elected this method as we
have concluded that we do not have sufficient historical exercise data to provide a reasonable basis upon
which to estimate expected term due to the limited period of time our equity shares have been publicly
traded. An increase in the expected term will increase compensation expense.

Dividend yield—We do not have plans to pay dividends in the foreseeable future. An increase in the
dividend yield will decrease compensation expense.

The fair value of stock option grants are estimated on the date of grant using the Black-Scholes option
pricing method with the following weighted-average assumptions used for stock option grants issued for the
fiscal years ended February 2, 2013, January 28, 2012 and January 29, 2011:

Dividend yield . . . . . . . . . . . . . . . . . . . . . . . . . . .
Volatility rate . . . . . . . . . . . . . . . . . . . . . . . . . . .
Weighted-average expected life (in years) . . . . .
Weighted-average risk-free interest rate . . . . . . .
Weighted-average fair value per share of stock

Fiscal Year Ended

February 2, 2013

January 28, 2012

January 29, 2011

0.0%
66.7%
6.25
1.1%

0.0%
65.0%
6.25
1.1%

0.0%
67.5%
6.50
2.4%

options granted . . . . . . . . . . . . . . . . . . . . . . . .

$19.40

$13.35

$12.24

Common Stock Share Repurchases—We may repurchase shares of the Company’s common stock under

authorizations made from time to time by our Board of Directors. Under applicable Washington State law, shares
repurchased are retired and not displayed separately as treasury stock on the consolidated financial statements.
Instead, the value of repurchased shares is deducted from retained earnings.

Income Taxes—Deferred income tax balances reflect the effects of temporary differences between the
carrying amounts of assets and liabilities and their respective tax bases. Valuation allowances may be established
when necessary to reduce deferred tax assets to the amount expected to be realized.

We recognize uncertain tax benefits only if it is “more likely than not” that the position is sustainable, based
on its technical merits. The tax benefit of a qualifying position is the largest amount of tax benefit that is greater
than fifty percent likely of being realized upon ultimate settlement with a taxing authority having full knowledge
of all relevant information. Interest and penalties related to uncertain tax positions, if any, are included in
provision for income taxes on the consolidated statements of income.

Earnings per Share—Basic earnings per share is based on the weighted average number of common shares

outstanding during the period. The dilutive effect of stock options and restricted stock is applicable only in
periods of net income. Diluted earnings per share is based on the weighted average number of common shares
and common share equivalents outstanding during the period. Common share equivalents included in the
computation represent shares issuable upon assumed exercise of outstanding stock options, employee stock
purchase plan funds held to acquire stock and non-vested restricted stock. Potentially anti-dilutive securities not
included in the calculation of diluted earnings per share are options to purchase common stock where the option
exercise price is greater than the average market price of the Company’s common stock during the period
reported.

Foreign Currency Translation—Assets and liabilities denominated in foreign currencies were translated
into U.S. dollars, the reporting currency, at the exchange rate prevailing at the balance sheet date. Revenue and
expenses denominated in foreign currencies were translated into U.S. dollars at the monthly average exchange
rate for the period. Gains or losses resulting from foreign currency transactions are included in other income
(expense), net on the consolidated statements of income, whereas, translation adjustments are reported as an
element of accumulated other comprehensive income on the consolidated balance sheets.

3. Recent Accounting Pronouncements

Recently Adopted Accounting Standards—In June 2011, the Financial Accounting Standards Board
(“FASB”) issued guidance that requires an entity to present the total of comprehensive income, the components
of net income and the components of other comprehensive income either in a single continuous statement of
comprehensive income or in two separate but consecutive statements. The guidance eliminates the option to
present the components of other comprehensive income as part of the statement of changes in shareholders’
equity. This guidance is effective for interim and annual reporting periods beginning after December 15, 2011,

with early adoption permitted. We adopted this guidance in the three months ended April 28, 2012. As this
guidance only amends the presentation of the components of comprehensive income, the adoption did not have
an impact on our financial position, results of operations or cash flows.

In May 2011, the FASB issued guidance that amends certain accounting and disclosure requirements related

to fair value measurements. This guidance is effective for interim and annual reporting periods beginning after
December 15, 2011. We adopted this guidance in the three months ended April 28, 2012. The adoption did not
have a material impact on our financial position, results of operations or cash flows.

Recently Issued Accounting Standards—In February 2013, the FASB issued guidance that requires an

entity to present information about reclassification adjustments from accumulated other comprehensive income
in their financial statements or footnotes. This guidance is effective for fiscal years and interim periods within
those years beginning after December 15, 2012. We will adopt this guidance for the fiscal quarter ended May 4,
2013 and we do not expect the adoption will have a material impact on our consolidated financial statements.

In July 2012, the FASB issued guidance that will allow an entity to first assess qualitative factors to

determine whether it is necessary to perform a quantitative impairment test for indefinite-lived intangible assets.
If entities determine, based on qualitative factors, the fair value of the asset is more likely than not less than the
carrying value, the two-step impairment test would be required. This guidance is effective for fiscal years
beginning after September 15, 2012, with early adoption permitted. We will adopt this guidance for the fiscal
year ending February 1, 2014 and we do not expect the adoption will have a material impact on our financial
position, results of operations or cash flows.

4. Business Combinations

Blue Tomato—On July 4, 2012, we acquired 100% of the outstanding stock of Blue Tomato for cash
consideration of 59.5 million Euros ($74.8 million). Blue Tomato is a leading European multi-channel retailer for
board sports and related apparel and footwear and the acquisition allows us to enter into the European
marketplace.

In addition, there is the possibility of future incentive payments to the sellers of Blue Tomato in an

aggregate amount of up to 22.1 million Euros ($30.1 million, using the exchange rate as of February 2, 2013) to
the extent that certain financial metrics are met for the fiscal year ending April 30, 2015 and the sellers remain
employed with Blue Tomato through April 30, 2015. Of the 22.1 million Euros future incentive payments,
17.1 million Euros ($23.3 million) is payable in cash, while 5.0 million Euros ($6.8 million) is payable in shares
of our common stock. We account for the estimated future incentive payments as compensation expense and
recognize this amount ratably over the term of service through April 2015. At February 2, 2013, we estimated
that we will be obligated for future incentive payments of 9.0 million Euros ($12.3 million) and for the fiscal
year ended February 2, 2013, we recorded $2.3 million of this amount, which is included in selling, general and
administrative expense on the consolidated statements of income.

The business combination was accounted for using the acquisition method of accounting, which requires an

acquirer to recognize assets acquired and liabilities assumed at the acquisition date fair values. The following
table summarizes the fair value at the date of acquisition (in thousands):

Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . .
Other long-term assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Current liabilities assumed . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term debt and other liabilities assumed . . . . . . . . . . . . .

Net assets acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 5,106
7,942
1,573
4,964
232
19,987
(4,877)
(5,420)
(2,125)

27,382

47,412

Total consideration transferred . . . . . . . . . . . . . . . . . . . . . . . .

$74,794

Inventories acquired were written up by $2.2 million to their estimated fair value, which we have recognized

as cost of goods sold during the fiscal year ended February 2, 2013.

The following table summarizes the identifiable intangible assets acquired that will not be subject to

amortization (in thousands):

Trade names and trademarks . . . . . . . . . . . . . . . . . . . . . .

$13,576

Intangible Asset
Amount

The following table summarizes the identifiable intangible assets acquired that will be subject to

amortization and their weighted-average amortization period:

Intangible Asset
Amount (in
Thousands)

Weighted-
Average
Amortization
Period (in Years)

Developed technology . . . . . . . . . . . . . . . . . . . . .
Customer relationships . . . . . . . . . . . . . . . . . . . . .

Total intangible assets subject to amortization . .

$3,771
2,640

$6,411

3.0
3.0

3.0

The remaining consideration transferred, after adjusting for identified intangible assets and the net assets
recorded at fair value, was $47.4 million, which was allocated to goodwill. The goodwill is attributed to Blue
Tomato’s workforce expertise and expected synergies. Of the goodwill recognized, approximately $34.9 million
is expected to be deductible for income tax purposes, in accordance with Austrian tax laws.

Transaction costs, such as investment advisory, legal and accounting fees, associated with the Blue Tomato
acquisition were $1.9 million for the fiscal year ended February 2, 2013. These expenses are recorded in selling,
general and administrative expense on the consolidated statements of income.

The foreign currency transaction net gain for the fiscal year ended February 2, 2013 was $0.5 million, which

primarily related to foreign currency fluctuations associated with the acquisition of Blue Tomato. Foreign
currency transaction gains and losses were not material for the fiscal years ended January 28, 2012 and
January 29, 2011.

The activity of Blue Tomato that was included in our consolidated statements of income from the
acquisition date to February 2, 2013 was net sales of $28.3 million and net income of $0.1 million. The net
income amount excludes the transaction costs associated with the acquisition and the future incentive payments
discussed above. The net income amount includes the charge recorded for the step-up in inventory to estimated
fair value in conjunction with the acquisition discussed above and amortization of intangible assets disclosed in
Note 5, “Goodwill and Intangible Assets.”

Pro Forma Financial Information—The following unaudited pro forma financial information shows the
results of operations for the fiscal years ended February 2, 2013 and January 28, 2012 (in thousands), as though
the acquisition of Blue Tomato had occurred on January 30, 2011. These amounts were calculated after
conversion to U.S. GAAP, conforming to our accounting policies and adjusting Blue Tomato results to reflect:
(i) the depreciation and amortization that would have been charged as a results of the fair value adjustments to
property, plant and equipment and intangible assets and (ii) the compensation expense associated with the
estimated future incentive payments to the sellers of Blue Tomato. The adjustments also reflect the income tax
effect of the pro forma adjustments.

The amounts also reflect the removal of the following non-recurring, transaction related costs and related

income tax effect from the fiscal year ended February 2, 2013 pro forma results: (i) the transaction costs of
$1.9 million associated with the Blue Tomato acquisition, (ii) the charge related to the fair value adjustment to
acquisition date inventory of $2.2 million and (iii) the foreign currency transaction gain of $0.5 million
associated with the foreign currency fluctuations associated with the acquisition of Blue Tomato. These amounts
are assumed to be included in the fiscal year ended January 28, 2012 pro forma amounts.

The pro forma financial information below is presented for illustrative purposes only and is not necessarily

indicative of the operating results that would have been achieved had the acquisition been completed as of the
date indicated above or the results that may be obtained in the future.

Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$680,524
$ 41,430

$591,961
$ 32,853

Fiscal Year Ended

February 2, 2013

January 28, 2012

Other Acquisitions—We acquired an additional business during the fiscal year ended February 2, 2013 for

an amount that is not material to our business. This business has been consolidated into our consolidated
financial statements since the acquisition date. Pro forma results of operations have not been presented because
the effect of this business combination is not material to our consolidated results of operations.

5. Goodwill and Intangible Assets

The following tables summarize the changes in the carrying amount of goodwill for the fiscal years ended

February 2, 2013 and January 28, 2012 (in thousands):

Balance at January 28, 2012 and January 29, 2011 . . . . . . . . .
Goodwill acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effects of foreign currency translation . . . . . . . . . . . . . . . . . . .

$13,154
47,413
4,009

Balance as of February 2, 2013 . . . . . . . . . . . . . . . . . . . . . . . .

$64,576

There was no impairment of goodwill for the fiscal years ended February 2, 2013, January 28, 2012 and

January 29, 2011.

The following table summarizes the gross carrying amount, accumulated amortization and the net carrying

amount of intangible assets at February 2, 2013 (in thousands):

February 2, 2013

Gross Carrying
Amount

Accumulated
Amortization

Intangible
Assets, Net

Intangible assets not subject to amortization:
Trade names and trademarks . . . . . . . . . . . . . . .
Intangible assets subject to amortization:
Developed technology . . . . . . . . . . . . . . . . . . . .
Customer relationships . . . . . . . . . . . . . . . . . . . .

$14,724

$ —

$14,724

4,090
3,031

795
570

3,295
2,461

Total intangible assets . . . . . . . . . . . . . . . . . . . .

$21,845

$1,365

$20,480

There was no impairment of intangible assets for the fiscal years ended February 2, 2013, January 28, 2012

and January 29, 2011.

Amortization expense of intangible assets for the fiscal year ended February 2, 2013 was $1.3 million. We

did not record amortization expense of intangible assets for the fiscal years ended January 28, 2012 and
January 29, 2011. Amortization expense of intangible assets is recorded in selling, general and administrative
expense on the consolidated statements of income. At February 2, 2013, estimated future amortization expense
for intangible assets is as follows (in thousands):

$2,374
2,374
1,008
—

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$5,756

6. Cash, Cash Equivalents and Marketable Securities

The following tables summarize the estimated fair value of cash, cash equivalents and marketable securities

and the gross unrealized holding gains and losses at February 2, 2013 and January 28, 2012 (in thousands):

February 2, 2013

Gross
Unrealized
Holding
Gains

Gross
Unrealized
Holding
Losses

Amortized
Cost

Cash and cash equivalents:

Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Money market funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
State and local government securities . . . . . . . . . . . . . . . . . . .

$ 6,271
8,305
3,003

Total cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . .

17,579

$ —
—
—

—

$ —
—
—

—

Estimated
Fair Value

$ 6,271
8,305
3,003

17,579

Marketable securities:

Corporate debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
State and local government securities . . . . . . . . . . . . . . . . . . .
Variable-rate demand notes . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,745
82,911
1,800

65
95
—

—
(179)
—

1,810
82,827
1,800

Total marketable securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$86,456

$ 160

$(179)

$86,437

Less: Long-term marketable securities (1) . . . . . . . . . . . . . . . . . . . .

Total current marketable securities . . . . . . . . . . . . . . . . . . . . . . . . .

(844)

$85,593

January 28, 2012

Gross
Unrealized
Holding
Gains

Gross
Unrealized
Holding
Losses

Amortized
Cost

Cash and cash equivalents:

6,343
5,139
3,297

Total cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . .

14,779

$ —
—
—

—

$ —
—
—

—

Estimated
Fair Value

6,343
5,139
3,297

14,779

Marketable securities:

2,016
126,047
30,610

30
335
—

—
(111)
—

2,046
126,271
30,610

Total marketable securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$158,673

$ 365

$(111)

$158,927

Less: Long-term marketable securities (1) . . . . . . . . . . . . . . . . . . .

Total current marketable securities . . . . . . . . . . . . . . . . . . . . . . . . .

(908)

$158,019

(1) At February 2, 2013 and January 28, 2012, we held one auction rate security, classified as available-for-sale

marketable securities and included in long-term other assets on the consolidated balance sheets.

All of our available-for-sale securities, excluding our auction rate security, have an effective maturity date

of two years or less and may be liquidated, at our discretion, prior to maturity. For the fiscal years ended
February 2, 2013, January 28, 2012 and January 29, 2011, realized gains and losses on sales of available-for-sale
marketable securities were not material.

The following tables summarize the gross unrealized holding losses and fair value for investments in an

unrealized loss position at February 2, 2013 and January 28, 2012, and the length of time that individual
securities have been in a continuous loss position (in thousands):

February 2, 2013

Less Than Twelve Months

12 Months or Greater

Total

Fair Value

Unrealized
Losses

Fair Value

Unrealized
Losses

Fair Value

Unrealized
Losses

Marketable securities:

State and local government

securities . . . . . . . . . . . . . . . . . . . .

$23,300

Total marketable securities . . . . . . . . . . .

$23,300

$(23)

$844

$(156)

$24,144

$(156)

$24,144

$(179)

January 28, 2012

Less Than Twelve Months

12 Months or Greater

Total

Fair Value

Unrealized
Losses

Fair Value

Unrealized
Losses

Fair Value

Unrealized
Losses

Marketable securities:

State and local government

securities . . . . . . . . . . . . . . . . . . . .

$20,900

Total marketable securities . . . . . . . . . . .

$20,900

$(19)

$1,408

$(92)

$22,308

$(111)

We did not record a realized loss for other-than-temporary impairments during the fiscal years ended
February 2, 2013, January 28, 2012 and January 29, 2011. At February 2, 2013 and January 28, 2012, we had

recorded a temporary impairment charge of $0.2 million and $0.1 million related to our $1.0 million par value
auction rate security. We do not intend to sell this security and it is more likely than not that we will be able to
hold the investment until the market improves.

7. Receivables

At February 2, 2013 and January 28, 2012, receivables on the consolidated balance sheets consisted of the

following (in thousands):

Credit cards receivable . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tenant allowances receivable . . . . . . . . . . . . . . . . . . . . . .
Interest receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

February 2, 2013

January 28, 2012

$6,020
1,006
506
1,935

$9,467

$2,941
1,158
1,155
1,030

$6,284

8. Fixed Assets

At February 2, 2013 and January 28, 2012, fixed assets on the consolidated balance sheets consisted of the

following (in thousands):

February 2, 2013

January 28, 2012

Leasehold improvements . . . . . . . . . . . . . . . . . . . . . . . . .
Fixtures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Land, building and building improvements . . . . . . . . . . .
Computer equipment, software, store equipment and

other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fixed assets, at cost
Less: Accumulated depreciation . . . . . . . . . . . . . . . . . . . .

$ 116,946
70,907
26,731

22,671

237,255
(121,781)

$ 102,486
56,122
19,310

17,622

195,540
(106,062)

Fixed assets, net of accumulated depreciation . . . . . . . . .

$ 115,474

$ 89,478

Depreciation expense on fixed assets was $19.4 million, $17.4 million, and $16.4 million for fiscal years

ended February 2, 2013, January 28, 2012 and January 29, 2011.

9. Other Liabilities

At February 2, 2013 and January 28, 2012, other liabilities on the consolidated balance sheets consisted of

the following (in thousands):

Accrued payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unredeemed gift cards . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued excise taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Allowance for sales returns . . . . . . . . . . . . . . . . . . . . . . .
Other current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . .

February 2, 2013

January 28, 2012

$ 6,355
4,268
3,852
1,227
2,530

$18,232

$ 5,177
3,460
4,224
937
908

$14,706

10. Revolving Credit Facility and Debt

We maintain a secured credit agreement with Wells Fargo Bank, N.A., which provides us with a secured
revolving credit facility until September 1, 2013 of up to $25.0 million, which, pursuant to an accordion feature,
may be increased to $35.0 million at our discretion. The secured revolving credit facility provides for the
issuance of a standby letter of credit in an amount not to exceed $5.0 million outstanding at any time and with a
term not to exceed 365 days. The commercial line of credit provides for the issuance of a commercial letter of
credit in an amount not to exceed $10.0 million and with terms not to exceed 120 days. The amount of
borrowings available at any time under our secured revolving credit facility is reduced by the amount of standby
and commercial letters of credit outstanding at that time. There were no outstanding borrowings under the
secured revolving credit facility at February 2, 2013 and January 28, 2012. We had open commercial letters of
credit outstanding under our secured revolving credit facility of $0.2 million at February 2, 2013 and $0.9 million
at January 28, 2012. The secured revolving credit facility bears interest at the Daily One Month LIBOR rate plus
1.00%. The credit agreement contains a number of restrictions and covenants that generally limit our ability to,
among other things, (1) incur additional debt, (2) undergo a change in ownership and (3) enter into certain
transactions. The credit agreement also contains financial covenants that require us to meet certain specified
financial tests and ratios, including, a maximum net loss not to exceed $10.0 million after taxes on a trailing four-
quarter basis provided, that, there shall be added to net income all charges for impairment of goodwill and store
assets not to exceed $5.0 million in aggregate, and a minimum quick ratio of 1.25. The quick ratio is defined as
our cash and near cash equivalents plus certain defined receivables divided by the outstanding borrowings. Our
accounts receivable, general intangibles, inventory and equipment have been pledged to secure our obligations
under the credit agreement. We must also provide financial information and statements to our lender. We were in
compliance with all such covenants at February 2, 2013.

Additionally, in conjunction with our acquisition of Blue Tomato, we assumed $2.3 million in long-term
debt, which relates to amounts borrowed to fund operations. This long-term debt had a weighted average interest
rate of 1.7% and has maturities through 2021. Long-term debt obligations at February 2, 2013 are as follows (in
thousands):

Debt obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less: Current portion of debt obligations (1) . . . . . . . . .

Total long-term debt obligations (2) . . . . . . . . . . .

February 2, 2013

$2,270
(322)

$1,948

(1) The current portion of debt obligations is recorded in other liabilities on the consolidated balance sheets.
(2) The long-term portion of debt obligations is recorded in long-term debt and other liabilities on the

consolidated balance sheets.

Future principal payments for long-term debt at February 2, 2013 are as follows (in thousands):

Fiscal 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fiscal 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fiscal 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fiscal 2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fiscal 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 322
327
333
262
234
792

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$2,270

11. Commitments and Contingencies

Operating Leases—Total rent expense, base rent expense and contingent and other rent expense for the

fiscal years ended February 2, 2013, January 28, 2012 and January 29, 2011 is as follows (in thousands):

Fiscal Year Ended

February 2, 2013

January 28, 2012

January 29, 2011

Base rent expense . . . . . . . . . . . . . . . . . .
Contingent and other rent expense (1) . .

Total rent expense . . . . . . . . . . . . . .

$47,280
30,721

$78,001

$41,566
27,214

$68,780

$37,140
24,660

$61,800

(1)

Included in other rent expense are payments of real estate taxes, insurance and common area maintenance
costs.

A majority of our leases provide for ongoing co-tenancy requirements or early cancellation clauses that

would further lower rental rates, or permit lease terminations, or both, in the event that co-tenants cease to
operate for specific periods or if certain sales levels are not met in specific periods. Most of the store leases
require payment of a specified minimum rent and a contingent rent based on a percentage of the store’s net sales
in excess of a specified threshold. Amounts in the table below do not include contingent rent, real estate taxes,
insurance or common area maintenance costs unless these costs are fixed and determinable. Future minimum
commitments on all leases at February 2, 2013 are as follows (in thousands):

Fiscal 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fiscal 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fiscal 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fiscal 2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fiscal 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 65,932
67,080
64,951
61,948
55,443
170,273

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$485,627

Purchase Commitments—At February 2, 2013 and January 28, 2012, we had outstanding purchase orders

to acquire merchandise from vendors of $120.4 million and $87.2 million. We have an option to cancel these
commitments with no notice prior to shipment, except for certain private label purchase orders in which we are
obligated to repay contractual amounts upon cancellation.

Litigation—We are involved from time to time in claims, proceedings and litigation arising in the ordinary
course of business. We have made accruals with respect to these matters, where appropriate, which are reflected
in our consolidated financial statements. For some matters, the amount of liability is not probable or the amount
cannot be reasonable estimated and therefore accruals have not been made. We may enter into discussions
regarding settlement of these matters, and may enter into settlement agreements, if we believe settlement is in the
best interest of the Company’s shareholders.

A putative class action, Chandra Berg et al. v. Zumiez Inc., was filed against the Company in the Los
Angeles Superior Court on February 25, 2009. On September 1, 2010, the Company announced that it had
reached an agreement to settle. The settlement agreement was $2.1 million, which includes settlement awards to
class members, incentive payments to the two plaintiffs, attorneys’ fees and costs and claims administration
costs. The settlement was recorded in selling, general and administrative expenses on the consolidated statements
of income for the fiscal year ended January 29, 2011 and was paid out on March 10, 2011.

Insurance Reserves—We use a combination of third-party insurance and self-insurance for a number of

risk management activities including workers’ compensation, general liability and employee-related health care

benefits. We maintain reserves for our self-insured losses, which are estimated based on historical claims
experience and actuarial and other assumptions. The insurance reserve at February 2, 2013 and January 28, 2012
was $1.2 million and $0.5 million.

12. Fair Value Measurements

We apply the following fair value hierarchy, which prioritizes the inputs used to measure fair value into
three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and
significant to the fair value measurement:

• Level 1—Quoted prices in active markets for identical assets or liabilities;

• Level 2—Quoted prices for similar assets or liabilities in active markets or inputs that are observable;

and

• Level 3—Inputs that are unobservable.

The following tables summarize assets measured at fair value on a recurring basis at February 2, 2013 and

January 28, 2012 (in thousands):

February 2, 2013

Level 1

Level 2

Level 3

Cash equivalents:

Money market funds . . . . . . . . . . . . . . . . . . . . . . . . . . .
State and local government securities . . . . . . . . . . . . . .

$ 8,305
—

$ —
3,003

$ —
—

Marketable securities:

Corporate debt securities . . . . . . . . . . . . . . . . . . . . . . . .
State and local government securities . . . . . . . . . . . . . .
Variable-rate demand notes . . . . . . . . . . . . . . . . . . . . . .

Long-term other assets:

State and local government securities . . . . . . . . . . . . . .
Equity investments . . . . . . . . . . . . . . . . . . . . . . . . . . . .

—
—
—

—
—

1,810
81,983
1,800

—
—
—

—
—

844
1,059

Total

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 8,305

$88,596

$1,903

January 28, 2012

Level 1

Level 2

Level 3

Cash equivalents:

Money market funds . . . . . . . . . . . . . . . . . . . . . . . . . . .
State and local government securities . . . . . . . . . . . . .

$5,139
—

$ —
3,297

$ —
—

Marketable securities:

Corporate debt securities . . . . . . . . . . . . . . . . . . . . . . .
State and local government securities . . . . . . . . . . . . .
Variable-rate demand notes . . . . . . . . . . . . . . . . . . . . .

Long-term other assets:

State and local government securities . . . . . . . . . . . . .
Equity investments . . . . . . . . . . . . . . . . . . . . . . . . . . . .

—
—
—

—
—

2,046
125,363
30,610

—
—
—

—
—

908
1,472

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$5,139

$161,316

$2,380

Our policy is to recognize transfers into and transfers out of hierarchy levels as of the actual date of the

event or change in circumstances that caused the transfer.

The Level 2 marketable securities primarily include state and local municipal securities, corporate debt
securities and variable-rate demand notes. Fair values are based on quoted market prices for similar assets or
liabilities or determined using inputs that use readily observable market data that are actively quoted and can be
validated through external sources, including third-party pricing services, brokers and market transactions. We
review the pricing techniques and methodologies of the independent pricing service for Level 2 investments and
believe that its policies adequately consider market activity, either based on specific transactions for the security
valued or based on modeling of securities with similar credit quality, duration, yield and structure that were
recently traded. We monitor security-specific valuation trends and we make inquiries with the pricing service
about material changes or the absence of expected changes to understand the underlying factors and inputs and to
validate the reasonableness of the pricing.

The Level 3 state and local government securities represent one auction rate security. Our valuation method
for the auction rate security is based on numerous assumptions including assessments of the underlying security,
expected cash flows, credit ratings, liquidity and other relevant factors.

The Level 3 equity investments primarily represent our 14.3% interest in a manufacturer of apparel and hard

goods. The equity investment is valued using comparative market multiples adjusted by an estimated discount
factor. We have elected to apply fair value accounting for this investment, which would otherwise be accounted
for under the equity method of accounting. We have elected fair value accounting, as we believe the terms of the
contract are more properly reflected through the fair value method.

Assets measured at fair value on a nonrecurring basis include items such as long-lived assets resulting from

impairment, if deemed necessary. There were no material assets measured at fair value on a nonrecurring basis
for the fiscal years ended February 2, 2013, January 28, 2012 and January 29, 2011.

13. Stockholders’ Equity

In November 2012, our Board of Directors authorized a share repurchase program that provided for the
repurchase of up to $22.0 million of outstanding common stock. This program was completed in December 2012.
In December 2012, our Board of Directors authorized a stock repurchase program that provides for the
repurchase of up to an additional $20.0 million of outstanding common stock. The repurchase program is
expected to continue through the fiscal year ending February 1, 2014, unless the time period is extended or
shortened by the Board of Directors.

The following table summarizes common stock repurchase activity during the fiscal year ended February 2,

2013 (in thousands except average price per repurchased shares):

Number of shares repurchased . . . . . . . . . . . . . . . . . . . . . . . . .
Average price per share of repurchased shares (with

1,265

commission) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total cost of shares repurchased . . . . . . . . . . . . . . . . . . . . . . .

$ 20.43
$25,843

At February 2, 2013, there remains $16.2 million available to repurchase shares under this program.

14. Equity Awards

We maintain several equity incentive plans under which we may grant incentive stock options, nonqualified
stock options, stock bonuses, restricted stock awards, restricted stock units and stock appreciation rights to
employees (including officers), non-employee directors and consultants.

Stock Options—The following table summarizes stock option activity for the fiscal years ended February 2,

2013, January 28, 2012 and January 29, 2011 (in thousands, except weighted-average exercise price and
weighted-average remaining contractual life):

Grant Date
Weighted-
Average Exercise
Price

Weighted-Average
Remaining
Contractual Life
(in Years)

Intrinsic
Value (1)

Stock Options

Outstanding at January 30, 2010 . . . . . . . . . . . . . . . .

1,495

Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

58
(392)
(43)

Outstanding at January 29, 2011 . . . . . . . . . . . . . . . .

1,118

Outstanding at January 28, 2012 . . . . . . . . . . . . . . . .

Outstanding at February 2, 2013 . . . . . . . . . . . . . . . .

Exercisable at February 2, 2013 . . . . . . . . . . . . . . . . .

Vested or expected to vest at February 2, 2013 (2) . .

90
(183)
(137)

888

55
(74)
(49)

820

619

817

$11.88

$19.13
$ 3.70
$18.68

$14.86

$22.33
$ 7.17
$21.45

$16.18

$31.79
$ 8.53
$20.91

$17.62

$14.27

4.13

4.66

$6,135

$4,782

$6,128

(1)

(2)

Intrinsic value for stock options is defined as the difference between the market price of the Company’s
common stock on the last business day of the fiscal year and the weighted average exercise price of in-the-
money options outstanding at the end of the fiscal year.
Includes outstanding vested options as well as outstanding, non-vested options after a forfeiture rate is
applied.

The following table summarizes additional information related to stock option activity for the fiscal years

ended February 2, 2013, January 28, 2012 and January 29, 2011 (in thousands):

Fiscal Year Ended

February 2, 2013

January 28, 2012

January 29, 2011

Aggregate intrinsic value of stock

options exercised . . . . . . . . . . . . . . .

$1,655

Vest-date fair value of stock options

vested . . . . . . . . . . . . . . . . . . . . . . . .

$4,881

$3,257

$3,809

$7,909

$2,094

The following table summarizes outstanding and exercisable options by exercise price at February 2, 2013:

Options Outstanding

Options
Exercisable

Number of
Options
(in thousands)

Weighted Average
Remaining
Contractual Life

Number of Options
(in thousands)

389
127
131
173

820

4.1
5.8
4.4
4.7

290
104
77
148

619

Exercise Price

Under
$ 10.00
$ 10.01-$ 20.00
$ 20.01-$ 30.00
$ 30.01-$ 40.00

Total

Restricted Stock—The following table summarizes restricted stock activity for the fiscal years ended

February 2, 2013, January 28, 2012 and January 29, 2011 (in thousands, except weighted-average fair value):

Grant Date
Weighted-
Average Fair
Value

Intrinsic
Value (1)

Restricted Stock

Outstanding at January 30, 2010 . . . . . . . . . . . . .

Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Vested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Outstanding at January 29, 2011 . . . . . . . . . . . . .

Outstanding at January 28, 2012 . . . . . . . . . . . . .

Outstanding at February 2, 2013 . . . . . . . . . . . . .

622

196
(195)
(31)

592

188
(221)
(56)

503

154
(236)
(39)

382

$ 9.67

$19.19
$10.11
$11.99

$12.55

$25.14
$12.47
$17.01

$16.79

$33.98
$15.21
$24.03

$23.97

$8,066

(1)

Intrinsic value for restricted stock is defined as the market value of the outstanding restricted stock on the
last business day of the fiscal year.

The following table summarizes additional information related to restricted stock activity for the fiscal years

ended February 2, 2013, January 28, 2012 and January 29, 2011 (in thousands):

Vest-date fair value of restricted stock
vested . . . . . . . . . . . . . . . . . . . . . . . .

$8,174

$5,524

$3,734

Fiscal Year Ended

February 2, 2013

January 28, 2012

January 29, 2011

Stock-Based Compensation—We recorded $6.0 million, $5.3 million and $4.9 million of total stock-based

compensation expense for the fiscal years ended February 2, 2013, January 28, 2012 and January 29, 2011.

At February 2, 2013, there was $9.5 million of total unrecognized compensation cost related to unvested
stock options and restricted stock grants and the remaining estimated future incentive payments payable in shares
of our common stock associated with the Blue Tomato acquisition. This cost has a weighted-average recognition
period of 1.1 years.

15. Employee Benefit Plans

We maintain the Zumiez Investment Plan, a qualified plan under Section 401(k) of the Internal Revenue
Code, covering eligible employees as defined in the plan documents. Our 401(k) matching and profit-sharing
contributions are discretionary and are determined annually by management. We committed $0.5 million,
$0.5 million and $0.4 million to the plan for the fiscal years ended February 2, 2013, January 28, 2012 and
January 29, 2011.

We offer an Employee Stock Purchase Plan (the “ESPP”) for eligible employees to purchase the Company’s

common stock at a 15% discount of the lesser of fair market value of the stock on the first business day or the
last business day of the offering period, subject to maximum contribution thresholds. The number of shares
issued under our ESPP was less than 0.1 million for each of the fiscal years ended February 2, 2013, January 28,
2012 and January 29, 2011.

16. Income Taxes

The components of earnings before income taxes for the fiscal years ended February 2, 2013, January 28,

2012 and January 29, 2011 are (in thousands):

Fiscal Year Ended

February 2, 2013

January 28, 2012

January 29, 2011

United States . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . .

$75,054
(4,775)

$62,794
(1,105)

$38,855
—

Total earnings before income

taxes . . . . . . . . . . . . . . . . . . . . .

$70,279

$61,689

$38,855

The components of the provision for income taxes for the fiscal years ended February 2, 2013, January 28,

2012 and January 29, 2011 are (in thousands):

Fiscal Year Ended

February 2, 2013

January 28, 2012

January 29, 2011

Current:

Federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total current

. . . . . . . . . . . . . . . . . . . .

Deferred:

Federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total deferred . . . . . . . . . . . . . . . . . . .

$23,982
4,689
1,054

29,725

571
(370)
(1,811)

(1,610)

$17,013
3,884
—

20,897

3,358
83
—

3,441

$11,813
2,324
—

14,137

662
(147)
—

515

Provision for income taxes . . . . . . . . .

$28,115

$24,338

$14,652

The reconciliation of the income tax provision at the U.S. federal statutory rate to our effective income tax

rate is as follows for the fiscal years ended February 2, 2013, January 28, 2012 and January 29, 2011:

Fiscal Year Ended

February 2, 2013

January 28, 2012

January 29, 2011

Expected U.S. federal income taxes at
statutory rates . . . . . . . . . . . . . . . . .

State and local income taxes, net of

federal effect . . . . . . . . . . . . . . . . . .
Tax exempt interest . . . . . . . . . . . . . . .
Non-deductible acquisition related

expenses (1) . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . .

35.0%

4.4
(0.6)

0.7
0.5

4.1
(0.9)

—
1.3

3.4
(1.2)

—
0.5

Effective tax rate . . . . . . . . . . . . .

40.0%

39.5%

37.7%

(1) Non-deductible acquisition related expenses are certain transaction costs associated with the acquisition of

Blue Tomato and accrued future incentive payments to the sellers of Blue Tomato that are not deductible for
tax purposes.

The components of deferred income taxes at February 2, 2013 and January 28, 2012 are (in thousands):

February 2,
2013

January 28,
2012

Deferred tax assets:

Deferred rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Employee benefits, including stock based compensation . . . . . . . . . . . .
Accrued liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net operating losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 15,989
5,915
1,768
943
846
871

$ 14,205
5,794
1,164
507
170
553

Total deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

26,332

22,393

Deferred tax liabilities:

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property and equipment
Goodwill and other intangibles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(18,233)
(6,965)
(543)

(25,741)

(417)

(14,997)
(2,042)
(497)

(17,536)

(271)

Net deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

174

$ 4,586

Reported as:

Current deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term deferred tax assets (included in long-term other assets) . . . .
Current deferred income tax liabilities (included in other liabilities)
. .
Long-term deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 3,885
1,846
(13)
(5,544)

$ 1,477
3,109
—
—

Net deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

174

$ 4,586

At February 2, 2013 and January 28, 2012, we had deferred tax assets related to foreign net operating loss
carryovers that could be utilized to reduce future years’ tax liabilities, totaling $0.8 million and $0.2 million. A
portion of these net operating loss carryovers begin expiring in fiscal 2030 and some have an indefinite
carryfoward period. At February 2, 2013 and January 28, 2012, we had a valuation allowance of $0.4 million and

$0.3 million, which is primarily related to net operating losses and other deferred tax assets of foreign
subsidiaries. The net change in the total valuation allowance was $0.1 million and $0.3 million for the fiscal
years ended February 2, 2013 and January 28, 2012.

We did not have unrealized tax benefits related to uncertain tax positions recorded at February 2, 2013 and

January 28, 2012. We file income tax returns in the U.S. federal jurisdiction and various state and foreign
jurisdictions. Our U.S. federal income tax returns are no longer subject to examination for years before fiscal
2009, with few exceptions, we are no longer subject to U.S. state examinations for years before fiscal 2008 and
we are no longer subject to examination for all foreign income tax returns before fiscal 2007.

17. Comprehensive Income

Comprehensive income represents all changes in equity during a period except those resulting from

investments by and distributions to shareholders. Other comprehensive income by component and the related tax
effects for the fiscal years ended February 2, 2013, January 28, 2012 and January 29, 2011 is as follows (in
thousands):

Before-Tax
Amount

Tax Expense
or Benefit

Net-of-Tax
Amount

Year ended February 2, 2013:
Foreign currency translation adjustments (1) . . . . . . . . . . . . . . . . . . . . . . . . .

$6,040

$ —

$6,040

Unrealized losses on available-for-sale investments:

Unrealized holding gains/(losses) arising during period . . . . . . . . . . . . .
Reclassification adjustment for (gains)/losses realized in net income . .

Net unrealized losses on available-for-sale investments . . . . . . . . . . . . .

(144)
(141)

(285)

65
55

120

(79)
(86)

(165)

Other comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$5,755

$ 120

$5,875

Year ended January 28, 2012:
Foreign currency translation adjustments (1) . . . . . . . . . . . . . . . . . . . . . . . . .

$ (19)

$ —

$ (19)

Unrealized gains on available-for-sale investments:

Unrealized holding gains/(losses) arising during period . . . . . . . . . . . . .
Reclassification adjustment for (gains)/losses realized in net income . .

Net unrealized gains on available-for-sale investments . . . . . . . . . . . . .

326
(46)

280

(127)
18

(109)

199
(28)

171

Other comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 261

$(109)

$ 152

Year ended January 29, 2011:
Unrealized losses on available-for-sale investments:

Unrealized holding gains/(losses) arising during period . . . . . . . . . . . . .
Reclassification adjustment for (gains)/losses realized in net income . .

$ (236)
42

Net unrealized losses on available-for-sale investments . . . . . . . . . . . . .

(194)

$ 92
(16)

$ (144)
26

(118)

Other comprehensive loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ (194)

$ 76

$ (118)

(1) Foreign currency translation adjustments are not adjusted for income taxes as they relate to permanent

investments in our international subsidiaries.

The changes in the balances of each component of accumulated other comprehensive income (loss), net of

tax, for the fiscal years ended February 2, 2013 and January 28, 2012 is as follows (in thousands):

Foreign currency
translation adjustments

Net unrealized gains
(losses) on available-
for-sale investments

Accumulated other
comprehensive
income (loss)

Balance at January 29, 2011 . . . . . . . . . . . . . . . . . . .
Current-period other comprehensive income . . . . . .

Balance at January 28, 2012 . . . . . . . . . . . . . . . . . . .

Current-period other comprehensive income . . . . . .

Balance at February 2, 2013 . . . . . . . . . . . . . . . . . . .

$ —

(19)

6,040

$6,021

$ (17)
171

154

(165)

$ (11)

$ (17)
152

135

5,875

$6,010

18. Earnings per Share, Basic and Diluted

The following table sets forth the computation of basic and diluted earnings per share (in thousands, except

per share amounts):

Fiscal Year Ended

February 2, 2013

January 28, 2012

January 29, 2011

$42,164

$37,351

$24,203

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Weighted average common shares for basic earnings per

share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dilutive effect of stock options and restricted stock . . . . . . . . .

30,742
531

Weighted average common shares for diluted earnings per

share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

31,273

Basic earnings per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Diluted earnings per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1.37

1.35

30,527
592

31,119

1.22

1.20

29,971
823

30,794

0.81

0.79

Total anti-dilutive common stock options not included in the calculation of diluted earnings per share were

0.2 million, 0.3 million and 0.3 million for the fiscal years ended February 2, 2013, January 28, 2012 and
January 29, 2011.

19. Exit and Disposal Activities

Distribution Center Relocation—During the fiscal year ended January 29, 2011, we acquired a 168,450
square foot building in Corona, California for $11.8 million and relocated our distribution facility from Everett,
Washington to this facility.

In conjunction with the closure of the Everett, Washington distribution facility, during the fiscal year ended

January 29, 2011, we recorded $0.9 million of employee benefit costs (severance and performance bonuses),
$0.6 million of lease termination costs and $0.8 million of other costs to exit the facility. Additionally, we incurred a
$0.3 million charge on disposal of long-lived assets and we recognized a $0.2 million benefit for the related deferred
rent liability. These amounts are included in cost of goods sold on the consolidated statements of income.

Ecommerce Fulfillment Center and Home Office Relocations—During the fiscal year ended February 2,

2013, we entered into a 10 year agreement to lease up to 153,095 square feet in Edwardsville, Kansas and
relocated our ecommerce fulfillment center to this facility. We believe that the Edwardsville, Kansas fulfillment
center will provide the additional capacity needed to support the continued growth of our ecommerce business,
while also increasing the speed at which we deliver product to our customers and lowering the freight and
distribution costs once the Edwardsville, Kansas fulfillment center is running effectively and at full capacity.

In conjunction with the ecommerce fulfillment relocation from Everett, Washington to Edwardsville,
Kansas and the relocation of our home office from Everett, Washington to Lynnwood, Washington, during the
fiscal year ended February 2, 2013, we have recorded $0.3 million of severance and other employee related costs,
$1.4 million in lease termination costs and $0.4 million in other exit costs. Of the total amount recorded during
the fiscal year ended February 2, 2013, $1.0 million was included in cost of goods sold and $1.1 million was
included in selling, general and administrative expenses on the consolidated statements of income.

We do not expect to incur further material costs related to the relocations. The following table is a summary
of the exit and disposal activity and liability balances as a result of our distribution center, ecommerce fulfillment
center and home office relocations for the fiscal years ended February 2, 2013, January 28, 2012 and January 29,
2011 (in thousands):

Employee
benefit costs

Lease
termination
costs (1)

Other exit
costs

January 30, 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustments (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . .

January 29, 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

January 28, 2012 (3) . . . . . . . . . . . . . . . . . . . . . . . . .
Additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustments (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ —
882
(876)
9

15
(15)
—

—
245
(245)
—

$ —
1,051
(305)
(453)

293
(59)
7

241
920
(864)
874

$ —
806
(806)
—

—
—
—

—
440
(440)
—

Total

$ —

2,739
(1,987)
(444)

308
(74)
7

241
1,605
(1,549)
874

February 2, 2013 (3) . . . . . . . . . . . . . . . . . . . . . . . . .

$ —

$1,171

$ —

$ 1,171

(1) The liability for lease termination costs is based on the present value of future rent obligations and other

related costs, net of estimated sublease rent, for the Everett, Washington exited facility, where we are under
lease until June 2017. We will monitor the estimated liability for lease termination costs in subsequent
periods and revise the liability, if necessary.

(2) The adjustment to the lease termination costs liability during the fiscal year ended January 29, 2011

represents the difference between the calculated lease termination cost as a result of the amended lease and
our initial estimate of lease termination costs recorded on the cease use date.

(3) The exit or disposal provisions at February 2, 2013 and January 28, 2012 are included in other liabilities and

long-term debt and other liabilities on the consolidated balance sheets.

(4) The adjustment to the lease termination costs liability during the fiscal year ended February 2, 2013

represents the outstanding deferred rent liability of $0.4 million associated with the Everett, Washington
exited facility and a $0.5 million adjustment recorded as a result of our revised estimate for lease
termination costs as of February 2, 2013.

20. Related Party Transactions

We committed charitable contributions to Zumiez Foundation of $0.7 million, $0.7 million and $0.6 million

for fiscal years ended February 2, 2013, January 28, 2012 and January 29, 2011. We have accrued charitable
contributions payable to Zumiez Foundation of $0.6 million at both February 2, 2013 and January 28, 2012.
Zumiez Foundation is a charitable based nonprofit organization focused on meeting various needs of the under-
privileged. The Company’s Chairman of the Board is also the President of Zumiez Foundation.

21. Segment Reporting

We identify our operating segments according to how our business activities are managed and evaluated.
Our operating segments have been aggregated and are reported as one reportable segment based on the similar
nature of products sold, production, merchandising and distribution processes involved, target customers and
economic characteristics.

The following table is a summary of product categories as a percentage of merchandise sales for the fiscal

years ended February 2, 2013, January 28, 2012 and January 29, 2011:

Fiscal Year Ended

February 2, 2013

January 28, 2012

January 29, 2011

Men’s Apparel . . . . . . . . . . . . . . . . . . .
Footwear . . . . . . . . . . . . . . . . . . . . . . .
Accessories . . . . . . . . . . . . . . . . . . . . .
Hardgoods . . . . . . . . . . . . . . . . . . . . . .
Junior’s Apparel
. . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . .

34%
23%
19%
11%
11%
2%

Total

. . . . . . . . . . . . . . . . . . . . . .

100%

33%
24%
20%
11%
10%
2%

100%

32%
23%
21%
12%
10%
2%

100%

The following tables present summarized geographical information (in thousands):

Fiscal Year Ended

February 2, 2013

January 28, 2012

January 29, 2011

Net sales (1):
United States . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . .

Total net sales . . . . . . . . . . . . . . .

$618,958
50,435

$669,393

$549,272
6,602

$555,874

$478,849

—

$478,849

(1) Net sales are allocated based on the location in which the sale was originated. Store sales are allocated based
on the location of the store and ecommerce sales are allocated to the U.S. for sales on www.zumiez.com and
to Austria for sales on www.blue-tomato.com.

February 2, 2013

January 28, 2012

Long-lived assets:

United States . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total long-lived assets . . . . . . . . . . .

$103,966
13,013

$116,979

$85,986
4,024

$90,010

22. Subsequent Event

On February 15, 2013, a putative class action lawsuit, Robert Steele v. Zumiez Inc., was filed against the
Company in the Superior Court of the State of California, County of San Francisco. The lawsuit purports to be
brought on behalf of a class of all persons who are employed, or who have worked as, assistant store managers for
the Company in the State of California from February 15, 2009 through the date of certification of the class in the
lawsuit. The lawsuit alleges causes of action for failure to pay overtime wages, failure to pay wages for work done
off-the-clock, failure to provide meal periods and rest breaks (and to pay meal and rest period premiums), failure to
pay terminated employees all wages due at the time of termination, failure to provide employees with accurate
itemized wage statements, failure to reimburse employees for business expenses and unfair business practices and
declaratory relief. The Company is investigating Plaintiff’s claims and preparing a response to the complaint. The
Court has not set a date for a hearing on class certification and has not set a trial date. At this stage of the litigation,
the Company is not in a position to predict the likelihood of an unfavorable outcome or the range of potential loss.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant

has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

SIGNATURES

ZUMIEZ INC.
/S/ RICHARD M. BROOKS

Signature
By: Richard M. Brooks Chief Executive
Officer and Director (Principal Executive
Officer)

March 19, 2013

Date

/S/ CHRISTOPHER C. WORK

March 19, 2013

Signature
By: Christopher C. Work, Chief Financial
Officer (Principal Financial Officer and
Principal Accounting Officer)

Date

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the

following persons on behalf of the Registrant and in the capacities and on the dates indicated.

/S/ THOMAS D. CAMPION

March 19, 2013

/S/ WILLIAM M. BARNUM, JR. March 19, 2013

Signature
Thomas D. Campion, Chairman

Date

Signature
William M. Barnum, Jr., Director

Date

/S/ MATTHEW L. HYDE

March 19, 2013

/S/ JAMES M. WEBER

March 19, 2013

Signature
Matthew L. Hyde, Director

Date

Signature
James M. Weber, Director

Date

/S/ GERALD F. RYLES

March 19, 2013

/S/ SARAH G. MCCOY

March 19, 2013

Signature
Gerald F. Ryles, Director

Date

Signature
Sarah G. McCoy, Director

Date

/S/ ERNEST R. JOHNSON

March 19, 2013

/S/ TRAVIS D. SMITH

March 19, 2013

Signature
Ernest R. Johnson, Director

Date

Signature
Travis D. Smith, Director

Date

2.1

3.1

3.2

4.1

10.6

10.8

10.9

10.10

10.12

10.13

10.15

10.17

10.18

21.1

23.1

31.1

31.2

32.1

EXHIBIT INDEX

Share Purchase Agreement, dated June 18, 2012, by and between Gerfried Schuller, Alexander Zezula
and Eff zwanzig Beteiligungsverwaltung GmbH [Incorporated by reference to Exhibit 2.1 to the
Form 8-K filed by the Company on July 10, 2012]

Articles of Incorporation. [Incorporated by reference to Exhibit 3.1 to the Company’s Registration
Statement on Form S-1 (file No. 333-122865)]

Bylaws. [Incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed
on August 25, 2008]

Form of Common Stock Certificate of Zumiez Inc. [Incorporated by reference to Exhibit 4.1 to the
Company’s Registration Statement on Form S-1 (file No. 333-122865)]

Zumiez Inc. 2004 Stock Option Plan. [Incorporated by reference to Exhibit 10.6 to the Company’s
Registration Statement on Form S-1 (file No. 333-122865)]

Zumiez Inc. 2005 Employee Stock Purchase Plan. [Incorporated by reference to Exhibit 10.8 to the
Company’s Registration Statement on Form S-1 (file No. 333-122865)]

Form of Indemnity Agreement between Zumiez Inc. and each of its officers and directors.
[Incorporated by reference to Exhibit 10.9 to the Company’s Registration Statement on Form S-1
(file No. 333-122865)]

Limited Liability Company Agreement of Zumiez Holdings LLC. [Incorporated by reference to
Exhibit 10.10 to the Company’s Registration Statement on Form S-1 (file No. 333-122865)]

Equity Purchase Agreement with Gerald R. Anderson, Brandon C. Batton, AC Fast Forward LLC and
AC Fast Forward Mgt., LLC dated May 16, 2006. [Incorporated by reference to Exhibit 10.12 to the
Company’s Quarterly Report on Form 10-Q for the period ended July 29, 2006 as filed on
September 12, 2006]

Lease Agreement between Merrill Creek Holdings, LLC and Zumiez Inc. dated October 2, 2006.
[Incorporated by reference to Exhibit 10.13 to the Company’s Form 8-K filed on October 4, 2006]

Zumiez Inc. 2005 Equity Incentive Plan, as amended and restated effective May 27, 2009.
[Incorporated by reference from Exhibit 10.15 to the Form 8-K filed by the Company on June 1, 2009]

Purchase and Sale Agreement and Joint Escrow Instructions with Railroad Street Land Holdings, LLC
dated February 18, 2010. [Incorporated by reference from Exhibit 10.17 to the Form 8-K filed by the
Company on February 22, 2010]

Credit Agreement, including Revolving Line of Credit Note, with Wells Fargo Bank, N.A. dated
August 29, 2011. [Incorporated by reference from Exhibit 10.18 to the Form 8-K filed by the
Company on August 31, 2011]

Subsidiaries of the Company.

Consent of Moss Adams LLP, Independent Registered Public Accounting Firm.

Certification of the Principal Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities
Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.

Certification of the Principal Financial Officer (Principal Accounting Officer) pursuant to
Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.

Certifications of the Principal Executive Officer and Principal Financial Officer (Principal Accounting
Officer) pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350.

101

The following materials from Zumiez Inc.’s Annual Report on Form 10-K for the annual period ended
February 2, 2013, formatted in XBRL (eXtensible Business Reporting Language):
(i) Consolidated Balance Sheets at February 2, 2013 and January 28, 2012; (ii) Consolidated Statements
of Income for the fiscal years ended February 2, 2013, January 28, 2012 and January 29, 2011; (iii)
Consolidated Statements of Comprehensive Income for the fiscal years ended February 2, 2013,
January 28, 2012 and January 29, 2011; (iv) Consolidated Statements of Changes in Shareholders’
Equity for the fiscal years ended February 2, 2013, January 28, 2012 and January 29, 2011; (v)
Consolidated Statements of Cash Flows for the fiscal years ended February 2, 2013, January 28, 2012
and January 29, 2011; and (vi) Notes to Consolidated Financial Statements. (1)

(1) The XBRL related information in Exhibit 101 to this Quarterly Report on Form 10-K shall not be deemed
“filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to
liability of that section and shall not be incorporated by reference into any filing or other document pursuant to
the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing
or document.

Copies of Exhibits may be obtained upon request directed to the attention of our General Counsel and Corporate
Secretary, 4001 204th Street SW, Lynnwood, Washington 98036, and are available at the SEC’s website found at
www.sec.gov.

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