This holiday season was pretty unusual, thanks to the coronavirus outbreak. Hence, retailers made extraordinary efforts to benefit out of the busiest period of the year. Overall, they mostly focused on e-commerce platforms including curbside pickup and delivery services amid such tough times. Likewise, leading lifestyle retailer Zumiez Inc. ZUMZ sought to expand its e-commerce and omni-channel platforms to provide consumers with the facility of quick and easy access to its products and brands.
Despite the ongoing pandemic uncertainties, this Lynnwood, WA-based retailer managed to report comparable sales (comps) growth of 1.7% for the ten-week period (ended Jan 9, 2021).
However, the ill impacts of the pandemic were evident. Apparently, total sales dipped 0.7% during the holiday period, affected by mandatory governmental closures and other restrictions owing to the pandemic. Europe was the hardest hit due to store closures. Moreover, Footwear, Women’s and Men’s categories remained soft.
Let’s Take an Insight
For the ten-week period, the company’s stores remained open for about 95% of the potential operating days, including significant closures in Europe and Eastern Canada. We note that Footwear registered largest comps decrease followed by Women’s and Men’s for the ten-week period (ended Jan 9, 2021). However, the Hardgoods category saw largest comps increase followed by Accessories in the same period.
From a regional perspective, Australia was the best-performing region during the holiday period. Fourth quarter to date through Jan 9 North America net sales inched up 0.2% with the United States up slightly. However, Canada was majorly impacted by store closures, and other international net sales, consisting of Europe and Australia, slipped 6.7%.
Management also cited that similar to the trends witnessed for Black Friday in November, sales in the off-peak weeks in December were robust. In the usual peak weeks, the company was mostly reliant on in-store sales which suffered owing to lower traffic and COVID-19-induced restrictions. Notably, comps were up 1.3% in December. The metric is tracking up double digits so far in January, suggesting a solid finish to the fiscal.
Markedly, the retailer is gaining from its focus on providing differentiated assortments. Moreover, the company has invested resources to boost localized merchandising assortments. It has considerably improved customers’ experience by integrating its physical and digital networks. It has also rolled out Zumiez Delivery, wherein the sales team goes directly to the customer's door. We believe that the company’s well-balanced store expansion and e-commerce strategies will help Zumiez keep track of the evolving patterns and drive top-line growth.
Notably, shares of this Zacks Rank #2 (Buy) company rose 6.5% during the trading session on Jan 11. Over the past three months, the company’s shares have gained 35.4% compared with the industry’s 55.1% increase. We note that the company witnessed 6.8% growth in the nine-week period (ended Jan 4, 2020).
More Key Picks in Retail
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L Brands LB, also a Zacks Rank #1 stock, has a long-term earnings growth rate of 13%.
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