The Washington-based retailer of sports-related teen apparel, Zumiez Inc. (ZUMZ), reported a 7.6% decline in comparable-store sales for the four weeks ended Feb 1, 2014. This compares with a comps rise of 0.6% for the five weeks ended Feb 2, 2013.
Moreover, net sales for January dipped 24.3% to $38.1 million from $50.3 million reported in the year-ago period.
Last month, the company reported dismal comps results, while sales improved on a year-over-year basis. The company reported a 2.4% decline in comparable-store sales for the 5 weeks ended Jan 4, 2014 compared with a 1.0% decline reported for the 5 weeks ended Dec 29, 2012. However, net sales for December climbed 4.2% to $125.3 million from $120.3 million reported in the year-ago period.
Zumiez is likely to report its fourth quarter and fiscal 2013 financial results on Mar 13, 2014. Given the company’s recent dismal sales performance, the company now estimates fourth-quarter sales in the $226–$229 million range, while comps are expected to decline in the low single digit range.
The company expects earnings per share to be 56–59 cents. Currently, the Zacks Consensus Estimate for the fourth quarter stands at 62 cents, way above the company’s forecasted earnings range. The company’s guidance for the fourth quarter includes estimated charges of $1.7 million or 5 cents related to the Blue Tomato acquisition.
We believe that the company’s well-balanced store expansion and e-Commerce strategies will help drive its top line going forward. Moreover, Zumiez aims to increase its store network to 600–700 stores in the long run. As of Feb 1, 2014, the company operated 551 stores, including 511 in the United States, 28 in Canada and 12 in Europe.
Zumiez currently has a Zacks Rank #4 (Sell). Better-performing stocks among apparel/shoe retailers are Christopher & Banks Corp. (CBK), Finish Line Inc. (FINL) and Foot Locker Inc. (FL). While Christopher & Banks carries a Zacks Rank #1 (String Buy), Finish Line and Foot Locker have a Zacks Rank #2 (Buy).
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