Zumiez lowers 3Q guidance on weak sales

Zumiez shares drop on disappointing sales trends, lower 3Q earnings guidance

Associated Press

EVERETT, Wash. (AP) -- Zumiez Inc. reported Wednesday that a key sales measure improved at its stores during October but the action-sports retailer's growth fell far short of the improvement that analysts expected.

The retailer said its sales have been much lower than expected due to the weak economy in Europe and it lowered its fiscal third-quarter earnings guidance.

Revenue from stores open at least a year increased 0.6 percent for the four-week period that ended Oct. 29. That compares with a 3.3 percent gain in the same period last year. Same-store sales is a key measure of a retailer's performance because it strips away and revenue recently opened or closed stores.

Analysts polled by Thomson Reuters were expecting the company to show a 4.6 percent gain for the month.

Total sales for October rose 20.2 percent to $41.9 million as shoppers spent more each visit but bought fewer items.

Zumiez now expects to earn 38 to 39 cents per share in its fiscal third quarter, down from its prior forecast of 42 to 45 cents per share. This includes its roughly $4 million, or 10 cents per share, in costs associated with its recent acquisition of European sports retailer Blue Tomato.

Analysts polled by FactSet forecast earnings of 46 cents per share for the period.

Shares of the Everett, Wash.-based company fell $1.27, or 4.8 percent, to close at $25.32. The stock lost $2.82, or 11.1 percent, at $22.50 in after-hours trading.

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