Yahoo Finance Zumiez's December Comps Jump 8% on Striking Holiday Sales - Analyst Blog
Washington-based retailer of sports-related teen apparel, Zumiez Inc. (ZUMZ), reported an 8.0% rise in comps for the five weeks ended Jan 3, 2015, in contrast to a 2.4% decline reported for the five weeks ended Jan 4, 2014. Solid comps growth for the month is attributed to a remarkable holiday season that gained from a favorable backdrop of lower gas prices and improved unemployment rate along with the right weather conditions.
The company’s net sales for December soared 14.4% to $143.4 million from $125.3 million posted last year.
Driven by the superb comps performance for December, the shares of Zumiez increased 3.28% in the aftermarket trading hours yesterday.
Last month, Zumiez reported comps growth of 6.3% for the 4-weeks ended Nov 29, 2014, as against growth of 1.7% registered in the year-ago period, ended Nov 30, 2013. Net sales for November rose 12.6% to $70.3 million compared with $62.4 million in the prior-year period.
A close look at the company’s combined sales performance for November and December reveals that the 2014 holiday season has been an uplifting one for Zumiez.
After a strong holiday season and encouraged by its sales performance so far in the quarter, the company has raised its sales and earnings guidance for the fourth quarter of fiscal 2014. The guidance upgrade can also be attributed to improved product margins. However, foreign currency headwinds will continue to play spoilsport.
Management now anticipates fourth-quarter revenues to come in the range of $255–$256 million compared with the prior forecast of $249–$251 million. Meanwhile, comps are expected to grow about 7%, substantially higher than the previously guided range of 3%–4% growth.
Further, the company expects earnings per share in the range of 75–77 cents versus the previous projection of 69–72 cents per share. However, the company maintained that the earnings expectation for the quarter includes an estimated charge of 2 cents per share related to the Blue Tomato acquisition.
Looking at the trailing nine months performance, we note that this Zacks Rank #2 (Buy) company has been delivering positive comps every month. We believe Zumiez’s constant focus on boosting productivity at existing stores, developing a leading omni-channel platform and enhancing its presence – both domestically and overseas, have led to an encouraging comps trend.
Other stocks performing well in the apparel-shoe retail industry include Shoe Carnival Inc. (SCVL), Pacific Sunwear of California Inc. (PSUN) and L Brands Inc. (LB). While Shoe Carnival and Pacific Sunwear sport a Zacks Rank #1 (Strong Buy), L Brands carries a Zacks Rank #2.
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