Zumiez's (ZUMZ) Q3 Earnings Coming Up: Key Factors at Play
Zumiez Inc. ZUMZ is likely to post a decrease in the top and bottom lines from the respective year-ago fiscal quarter’s reported figures in its third-quarter fiscal 2023 earnings results on Nov 30 after the closing bell. The Zacks Consensus Estimate for quarterly sales is pegged at $214 million, indicating a decline of 10% from last year’s tally.
The consensus estimate for quarterly earnings is pegged at a loss of 17 cents a share against earnings of 36 cents per share reported in the year-ago quarter. The consensus mark has been stable in the past 30 days.
This Lynnwood, WA-based player witnessed an average earnings surprise of 39% in the trailing four quarters.
Zumiez Inc. Price, Consensus and EPS Surprise
Zumiez Inc. price-consensus-eps-surprise-chart | Zumiez Inc. Quote
Factors to Note
Zumiez’s quarterly performance is likely to have been hurt by a challenging operating landscape as consumer demand continues to be pressured by the ongoing impact of inflation on discretionary spending.
On its last earnings call, management projected third-quarter sales in the $211-$216 million band and product margins to be down slightly from the third quarter of fiscal 2022. It expected consolidated operating margins between negative 1.5% and negative 2.5% and a loss of 15-25 cents per share for the fiscal third quarter.
The decrease in earnings is likely to result from the restructuring of the cost framework amid reduced sales, compounded by margin constraints. Elevated costs are expected to result from higher fixed expenses, including occupancy costs, store operating hours dictated by mall schedules, fixed payroll outlays across the company and other corporate expenditures. These are expected to have weighed on earnings performance in the to-be-reported quarter.
On its last reported quarter’s earnings call, management indicated that the company had a soft start to the fiscal third quarter. It noted that net sales for the 37 days ended Sep 4, 2023 fell 7.7% year over year, while comparable sales declined 8.6%. The consensus estimate for the overall comparable sales indicates a decline of 10.9% in the fiscal third quarter.
From a regional perspective, net sales in the 37 days ended Sep 4 fell 10.1% year over year for the North American business and increased 14.7% for the international business. Excluding foreign currency impacts, North American sales were down 9.9%, and other international net sales increased by 8.5%.
Analyzing categories, the men's category showed a positive comparable performance for the 37-day period ended Sep 4, 2023, while all other categories had negative results. Footwear had the most significant decline, followed by women's, accessories and hard goods. Total dollars per transaction increased during this period, driven by higher average unit retail and units per transaction.
On the positive front, Zumiez emphasizes collaborating with brands to enhance speed and flexibility. It also directs investments toward innovative methods that foster human-to-human connections with customers, introducing novel ways to enrich the overall shopping experience. These positives are likely to have provided some cushion to the results in the to-be-reported quarter.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for Zumiez this time. 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. However, that’s not the case here, as elaborated below.
Zumiez has an Earnings ESP of 0.00% and a Zacks Rank of 3. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Stocks With the Favorable Combination
Here are some companies, which, according to our model, have the right combination of elements to beat on earnings:
Abercrombie & Fitch Co. ANF currently has an Earnings ESP of +8.63% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The company is likely to register a bottom-line increase when it reports fourth-quarter fiscal 2023 numbers. The Zacks Consensus Estimate for the quarterly earnings per share of $2.12 suggests a rise of 161.7% from the year-ago quarter.
Abercrombie & Fitch’s top line is expected to increase year over year. The consensus estimate for quarterly revenues is pegged at $1.34 billion, which indicates a rise of 12% from the figure reported in the prior-year quarter. ANF has a trailing four-quarter earnings surprise of 713%, on average.
American Eagle Outfitters AEO currently has an Earnings ESP of +4.55% and a Zacks Rank of 2. The company is expected to register bottom-line growth when it reports fourth-quarter fiscal 2023 results. The Zacks Consensus Estimate for quarterly earnings per share of 44 cents suggests a surge of 18.9% from the year-ago quarter.
American Eagle Outfitters’ top line is anticipated to rise year over year. The consensus mark for revenues is pegged at $1.56 billion, indicating growth of 4.5% from the figure reported in the year-ago quarter. AEO has a trailing four-quarter earnings surprise of 23%, on average.
Target Corporation TGT currently has an Earnings ESP of +1.03% and a Zacks Rank of 2. The company is expected to register a bottom-line increase when it reports fourth-quarter fiscal 2024 results. The Zacks Consensus Estimate for quarterly earnings per share of $2.37 suggests growth of 25.4% from the year-ago quarter.
Target Corporation's top line is anticipated to rise year over year. The consensus mark for revenues is pegged at $31.87 billion, indicating a rise of 1.5% from the figure reported in the year-ago quarter. TGT has a trailing four-quarter earnings surprise of 30.8%, on average.
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Zumiez Inc. (ZUMZ) : Free Stock Analysis Report
Target Corporation (TGT) : Free Stock Analysis Report
Abercrombie & Fitch Company (ANF) : Free Stock Analysis Report
American Eagle Outfitters, Inc. (AEO) : Free Stock Analysis Report
