Following the dismal comparable-store sales (comps) for February, the Wash.-based retailer of sports-related teen apparel, Zumiez Inc. (ZUMZ), reported a 2.1% increase in comps for the 5-weeks ended Apr 6, 2013. This compares to a comps increase of 14.1% reported for the 5-weeks ended Mar 31, 2012. Net sales for March surged 19.7% to $61.0 million from $50.9 million reported in the year-ago period.
Last month, Zumiez reported a comps decline of 8.9% for the 4-weeks ended Mar 2, 2013 compared with an increase of 14.2% in the 4-weeks ended Feb 25, 2012. Net sales for the period surged 10.6% to $44.5 million from $40.2 million reported in the year-ago period.
Further, this Zacks Rank #3 (Hold) company reported solid fourth-quarter fiscal 2012 adjusted earnings of 75 cents per share on Mar 15, surpassing the Zacks Consensus Estimate of 73 cents. Bottom-line results benefited from the successful execution of the growth strategies outlined at the onset of fiscal 2012 as well as contributions from the Blue Tomato operations.
Net sales increased 22.1% to $224.4 million from $183.9 million in the comparable year-ago quarter. Quarterly sales were above the Zacks Consensus Estimate of $222.0 million. However, comps dipped 1.0% mainly due to a decline in comparable store transactions offset by an increase in dollars per unit.
Further, the company anticipates first-quarter fiscal 2013 earnings in the range of 4 cents – 7 cents per share. The current Zacks Consensus Estimate is pegged at 9 cents per share, above the company’s guidance range.
Management anticipates first-quarter revenues to be in the range of $141–$144 million, while comps are likely to decline in the mid-single-digit range.
We believe that the company’s well-balanced store expansion and e-Commerce strategies will drive its top line further. Treading on the footsteps of its competitors such as Abercrombie & Fitch Company (ANF) and Foot Locker Inc. (FL), Zumiez is targeting to augment its store network to 600–700 stores in the long run.
The company plans to expand its store base by opening 60 new stores in fiscal 2013, comprising up to 10 stores in Canada and 6 in Europe. As of Apr 6, 2013, the company operated 502 stores, including 473 in the United States, 21 in Canada and 8 in Europe.
Dealing in action sports-related apparel, footwear, equipment and accessories, Zumiez, which competes primarily with Hot Topic Inc. (HOTT), targets young men and women in the 12–24 year age group who seek popular lifestyle brands centered on extreme sports activities.
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