Here's How Zumiez (ZUMZ) is Poised Ahead of Q2 Earnings

Zacks Equity Research

September 6, 2022 at 11:45 AM·5 min read

Zumiez Inc. ZUMZ is likely to post a decrease in the top and bottom lines from the respective year-ago quarter’s reported figures when it announces second-quarter fiscal 2022 earnings on Sep 8, after the closing bell. The Zacks Consensus Estimate for quarterly sales is pegged at $233 million, indicating a decline of 13.4% from the year-ago quarter.

The Zacks Consensus Estimate for quarterly earnings is pegged at 47 cents a share, suggesting a plunge of 53.9% from the year-ago fiscal period. The consensus mark has dipped 3 cents in the past 30 days.

A glimpse of this Lynnwood, WA-based player’s performance shows that it delivered a negative earnings surprise of 24.2% in the trailing four quarters, on average.

Key Factors to Note

Zumiez’s quarterly performance might have been hurt by a challenging operating landscape, including numerous headwinds like supply-chain bottlenecks, inflation, higher logistics costs and a tight labor market. Any deleverage in SG&A costs might have been added deterrents.

On its last earnings call, management had guided second-quarter fiscal 2022 net sales between $232 million and $239 million, which suggests a decline from $268.7 million reported in the year-ago period. It had projected consolidated operating margins in the range of 5-6.5% with earnings per share of 45-55 cents versus 94 cents earned in the year-earlier quarter.

In addition, management had shared updates for May on its last earnings call. Net sales for the four-week period ended May 28, 2022 fell 20.9% year over year and 3.3% from the level during the four-week period ended Jun 1, 2019. From a regional perspective, net sales of the North American business fell 23.5% year over year in the aforementioned period, while the metric at the Other international business dipped 0.3% from last year’s level. All categories were down in total sales from the year-ago period’s level. Men's remained the most negative category, followed by hard goods, accessories, women's and footwear for the four-week period.

On the positive front, we cannot ignore Zumiez’s efforts to mitigate these challenges. The company’s consumer-centric approach, merchandise initiatives and expense management remain encouraging. ZUMZ has been focused on store-expansion and omni-channel efforts.

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for Zumiez this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zumiez has an Earnings ESP of -19.58 and a Zacks Rank #4 (Sell).

Stocks With Favorable Combination

Here are some companies worth considering as our model shows that these have the right combination of elements to beat on earnings this season:

Casey's General Stores CASY currently has an Earnings ESP of +11.33% and a Zacks Rank #3. The company is expected to register a bottom-line increase when it reports first-quarter fiscal 2023 results. The Zacks Consensus Estimate for the quarterly earnings per share of $3.32 suggests an increase of 4.1% from the year-ago quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.

Casey's General’s top line is anticipated to have risen year over year. The consensus mark for CASY’s revenues is pegged at $4.59 billion, indicating an increase of 44.2% from the figure reported in the year-ago quarter. Casey's General has a trailing four-quarter earnings surprise of 5.8%, on average.

Dave & Buster's Entertainment PLAY currently has an Earnings ESP of +2.97% and a Zacks Rank #3. The company is likely to register a decline in the bottom line when it reports second-quarter fiscal 2022 numbers. The Zacks Consensus Estimate for the quarterly earnings per share of $1.01 suggests a decline of 5.6% from the year-ago quarter.

Dave & Buster's Entertainment’s top line is expected to have increased year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $432.3 million, which indicates an increase of 14.5% from the figure reported in the prior-year quarter. PLAY has a trailing four-quarter earnings surprise of 41.1%, on average.

Campbell Soup Company CPB currently has an Earnings ESP of +0.05% and a Zacks Rank #3. The company is expected to register a decrease in the bottom line when it reports first-quarter fiscal 2023 results. The Zacks Consensus Estimate for the quarterly earnings per share of 56 cents suggests a dip of 1.1% from the year-ago quarter.

Campbell Soup’s top line is anticipated to have increased year over year. The consensus mark for CPB’s revenues is pegged at $2.34 billion, indicating an increase of 4.6% from the figure reported in the year-ago quarter. CPB has a trailing four-quarter earnings surprise of 6.5%, on average.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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Zumiez Inc. (ZUMZ) : Free Stock Analysis Report

Campbell Soup Company (CPB) : Free Stock Analysis Report

Casey's General Stores, Inc. (CASY) : Free Stock Analysis Report

Dave & Buster's Entertainment, Inc. (PLAY) : Free Stock Analysis Report

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