California lawsuit settlement to cost Zumiez $2.1 million

Everett-based retailer Zumiez said Wednesday it has reached a tentative agreement to settle an employee lawsuit over alleged California wage-and-hour-law violations.

Zumiez expects the settlement, which is subject to court approval, to cost the company about $2.1 million.

As a result, the youth-oriented retailer downwardly revised its second-quarter financial results. It shows a quarterly loss of $1.2 million, or 4 cents a share, erasing a previously reported profit of $114,000.

The lawsuit, filed in Los Angeles Superior Court in February 2009, is similar to numerous legal complaints against retailers and others doing business in California, Zumiez said in a statement. The lawsuit accused Zumiez of failing to pay overtime wages to current and former store managers in California, not providing managers with meal periods and rest breaks, and not reimbursing retail employees for clothes required by its dress code, among other things.

The company noted that although it thinks the lawsuit's allegations lack merit, it's settling to avoid "significant legal fees, other expenses and management time that would have to be devoted to protracted litigation."

Also Wednesday, Zumiez posted a 9.1 percent increase in August sales at stores open at least a year, beating Wall Street's prediction for a 7.7 percent gain. A year ago, Zumiez had a same-store sales decline of 12.1 percent.

The company's total monthly sales rose nearly 15 percent, to $59.4 million, suggesting it could emerge a winner in the back-to-school shopping season.

Zumiez sells skateboard- and snowboard-inspired apparel, shoes and accessories at 396 stores in the U.S.

It released both statements after the end of regular stock-market trading Wednesday. Shares of Zumiez closed the regular session up $1.16, or 7.8 percent, to $16.00.

Amy Martinez: 206-464-2923 or amartinez@seattletimes.com