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Will Zumiez's (ZUMZ) Earnings Continue to Increase in Q3?

Zacks Equity Research

Zumiez Inc. ZUMZ is scheduled to report third-quarter fiscal 2019 results on Dec 5, after the closing bell. We note that in the trailing four quarters, the company’s bottom line outperformed the Zacks Consensus Estimate by 60.9%, on average. In the last reported quarter, the company beat the consensus mark by a wide margin.

What to Expect This Time

The Zacks Consensus Estimate for third-quarter earnings has remained unchanged over the past 30 days at 59 cents. This suggests a rise of 7.3% from the year-ago quarter’s reported figure. Management had guided third-quarter earnings of 55-61 cents a share.

For revenues, the consensus mark is pegged at $260.4 million, indicating an increase of 4.7% from the figure reported in the year-ago quarter.

Zumiez Inc. Price, Consensus and EPS Surprise


Zumiez Inc. Price, Consensus and EPS Surprise

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

Key Things to Note

Zumiez has been focusing on providing differentiated assortments, expanding its store base and implementing advanced technology to augment customers’ shopping experience across diverse channels. Further, it has been boosting competitiveness by making investments in logistics, planning and allocation.

Also, the company has been expanding e-commerce and omni-channel platforms to provide consumers with the facility of quick and easy access to its products and brands. It considerably improved customers’ experience by integrating its physical and digital networks. This, in turn, allows customers to access inventories through all channels alongside availing facilities like buy online, pick up in store, reserve online and pay in store. These factors have been aiding the company’s top-line performance. 

In the last earnings call, the company projected comps growth of 3-5% and net sales between $258 million and $263 million for the quarter under review. Furthermore, management expects consolidated operating margin of 7-7.7% for the third quarter compared with 7.4% reported in the same period last year. We believe that any increase in SG&A expenses on account of store openings may hurt margin to an extent.

What the Zacks Model Predicts

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 carries a Zacks Rank #3 but has an Earnings ESP of 0.00%.

Stocks Poised to Beat Earnings Estimates

Here are a few companies you may want to consider, as our model shows that these have the right combination to post an earnings beat:

Costco Wholesale Corporation COST has an Earnings ESP of +1.01% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Dollar General DG has an Earnings ESP of +0.65% and a Zacks Rank #2.

Big Lots, Inc. BIG has an Earnings ESP of +3.85% and a Zacks Rank #3.

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Zumiez Inc. (ZUMZ) : Free Stock Analysis Report
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