Zumiez (ZUMZ) Posts Robust January Comps, Sales Surge 16% - Analyst Blog
Zumiez Inc. (ZUMZ), which still appears to be in its holiday mood, reported a 12.3% rise in comps for the four weeks ended Jan 31, 2015, in contrast to a 7.6% decline reported for the four weeks ended Feb 1, 2014.
This Washington-based sports-related teen apparel retailer’s net sales for January soared 16% to $44.1 million from $38.1 million posted last year.
Looking back, the company reported solid sales performance in November and December, resulting in an upbeat 2014 holiday season for Zumiez.
Last month, Zumiez reported an 8% rise in comps for the five weeks ended Jan 3, 2015, in contrast to a 2.4% decline reported for the five weeks ended Jan 4, 2014. The company’s net sales for December soared 14.4% to $143.4 million from $125.3 million posted last year.
For November, Zumiez reported comps growth of 6.3% for the four weeks ended Nov 29, 2014, as against growth of 1.7% registered in the year-ago period, ended Nov 30, 2013. Net sales for November rose 12.6% to $70.3 million compared with $62.4 million in the prior-year period.
After a strong holiday season, the company raised its sales and earnings guidance for the fourth quarter of fiscal 2014. The guidance upgrade can also be attributed to improved product margins. However, foreign currency headwinds will continue to play spoilsport.
Management anticipates fourth-quarter revenues to come in the range of $255–$256 million compared with the prior forecast of $249–$251 million. Meanwhile, comps are expected to grow about 7%, substantially higher than the previously guided range of 3–4% growth.
Further, the company expects earnings per share in the range of 75–77 cents, up from the previous projection of 69–72 cents per share. However, the company maintained that the earnings expectation for the quarter includes an estimated charge of 2 cents per share related to the Blue Tomato acquisition.
Looking at the trailing 10 months performance, we note that this Zacks Rank #2 (Buy) company has been delivering positive comps every month. We believe Zumiez’s constant focus on boosting productivity at existing stores, developing a leading omni-channel platform and enhancing its presence, both domestically and overseas, have led to an encouraging comps trend.
Other stocks worth considering in the apparel-shoe retail industry include Stage Stores Inc. (SSI), Pacific Sunwear of California Inc. (PSUN) and L Brands Inc. (LB). While Stage Stores and Pacific Sunwear sport a Zacks Rank #1 (Strong Buy), L Brands carries a Zacks Rank #2.
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