The Washington-based retailer of sports-related teen apparel, Zumiez Inc. (ZUMZ), reported a 2.9% decline in comparable-store sales for the five weeks ended Apr 5, 2014, while it exceeded analyst expectations. This compares with a comps increase of 2.1% for the five weeks ended Apr 6, 2013.
Moreover, net sales for March rose 4.3% to $63.6 million from $61.0 million reported in the year-ago period. Sales for the month suffered mainly due to reduced purchases and lower spending on each purchase. Sales trends remained strong in the accessories and juniors categories while for the footwear, men's and boy's departments it remained soft.
Last month, the company reported a 2.0% improvement in comparable-store sales for the four weeks ended Mar 1, 2014, compared with a comps decline of 8.9% for the four weeks ended Mar 2, 2013. Moreover, net sales for February rose 8.8% to $48.4 million from $44.5 million reported in the year-ago period.
Along with its fourth-quarter results, on Mar 14, Zumiez announced its sales and earnings guidance for the first quarter of fiscal 2014. Management anticipates first-quarter revenues in the range of $156–$160 million, while comps are likely to decrease in the low single-digit range.
Based on sales projections for the quarter, the company formulated a bottom-line guidance of net loss per share of 2 cents to earnings per share of 3 cents. The earnings expectation also includes estimated charges of 2 cents per share related to the Blue Tomato acquisition.
However, we believe that the company’s well-balanced store expansion and e-Commerce strategies will help drive its top line going forward. Moreover, Zumiez aims to increase its store network to 600–700 stores in the long run. As of Apr 5, 2014, the company operated 555 stores, including 513 in the United States, 29 in Canada and 13 in Europe.
Zumiez currently has a Zacks Rank #3 (Hold). Better-performing stocks among apparel/shoe retailers are American Apparel Inc. (APP), Foot Locker Inc. (FL) and Hanesbrands Inc. (HBI), all of which carry a Zacks Rank #2 (Buy).