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Zumiez (ZUMZ) Queues Up for Q4 Earnings: Factors to Know

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Zumiez Inc. ZUMZ is likely to register an increase in the bottom line when it reports fourth-quarter fiscal 2020 numbers on Mar 11, after the closing bell. We note that the Zacks Consensus Estimate for earnings for the quarter under review has been stable at $1.61 over the past 30 days. The figure suggests growth of roughly 8.8% from the year-ago period.

Notably, this Lynnwood, WA-based company has a trailing four-quarter earnings surprise of 47.6%, on average. In the last reported quarter, the company delivered an earnings surprise of 52.6%.

Meanwhile, the Zacks Consensus Estimate for revenues is pegged at $327 million, indicating a marginal decline of 0.5% from the prior-year reported figure.

Key Factors to Note

Mandatory governmental closures and other restrictions due to the pandemic might have impacted Zumiez’s fourth-quarter performance. The company had previously informed that total sales during the 10-week period ended Jan 9, 2021 declined 0.7%. During the said period, stores remained open for about 95% of the potential operating days, including significant closures in Europe and Eastern Canada.

From a regional perspective, North America net sales inched up 0.2% during the aforementioned period, with the United States up slightly, while Canada significantly hurt by store closures. Other international net sales, which comprises Europe and Australia, declined 6.7%. In fact, Europe was the hardest hit due to store closures. However, Australia was the best-performing region.

Category wise, Footwear witnessed sharp decline in comparable sales, followed by Women’s and Men’s, during the 10-week period. Impressively, the Hardgoods category registered largest comparable sales increase, followed by Accessories in the same period. We note that overall comparable sales rose 1.7% for the 10-week period.

Markedly, Zumiez has been striving to expand e-commerce and omni-channel platforms to provide consumers with the facility of quick and easy access to its products and brands. No wonder, the company has been bolstering competitiveness by making investments in logistics, planning and allocation. Evidently, management has been taking every measure to mitigate the impact of the pandemic. These include optimizing capital expenditures and minimizing operating costs among others.

However, the impact of costs associated with digital fulfilment and supply chain, and COVID-19 related expenses on margins cannot be ruled out.

Zumiez Inc. Price, Consensus and EPS Surprise

Zumiez Inc. Price, Consensus and EPS Surprise
Zumiez Inc. Price, Consensus and EPS Surprise

Zumiez Inc. price-consensus-eps-surprise-chart | Zumiez Inc. Quote

What the Zacks Model Unveils

Our proven model predicts 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 chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zumiez has a Zacks Rank #3 and an Earnings ESP of +0.37%.

3 More Stocks With Favorable Combination

Here are three other companies you may want to consider as our model shows that these too have the right combination of elements to post an earnings beat:

Ulta Beauty ULTA presently has an Earnings ESP of +6.24% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Ollie's Bargain Outlet OLLI currently has an Earnings ESP of +3.73% and a Zacks Rank #3.

Dollar General DG has an Earnings ESP of +1.23% and a Zacks Rank #3 at present.

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