Following a positive comps trend built over the trailing 11 months, Zumiez Inc. ZUMZ recently reported yet another month of impressive sales results. The company reported a 6.9% improvement in comparable store sales (comps) for the four-week period ended Feb 28, 2015, compared with a 2% rise recorded for the same period last year.
This Washington-based, sports-related teen apparel retailer’s net sales for February soared 11.6% to $54 million from $48.4 million posted in the year-ago period.
Looking back, the company posted solid sales results in January. Zumiez reported a 12.3% rise in comps for the four weeks ended Jan 31, 2015. Further, the company’s net sales for January advanced 16% to $44.1 million.
Prior to that, the company’s sales data for November and December was also impressive, resulting in an upbeat 2014 holiday season for Zumiez.
In December, Zumiez reported an 8% rise in comps for the five weeks ended Jan 3, 2015. The company’s net sales for the month soared 14.4% to $143.4 million from $125.3 million posted last year. For November, Zumiez reported comps growth of 6.3%, while net sales rose 12.6% to $70.3 million.
After a strong holiday season performance, the company had raised its sales and earnings guidance for the fourth quarter of fiscal 2014. The upbeat outlook can also be attributed to improved product margins. However, foreign currency headwinds will continue to play a part.
Management 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, up from 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.
The current Zacks Consensus Estimate is pegged at 80 cents per share, which may witness a downward revision,
We believe that this Zacks Rank #2 (Buy) company’s constant focus on boosting productivity at existing stores, developing a leading omni-channel platform and enhancing its presence, both domestically and overseas, has led to an encouraging comps trend.
Apart from Zumiez, other retailers which recently posted their comps data for February include Rite Aid Corp. RAD, The Gap Inc. GPS and Conns Inc. CONN. While Conns’ and Gap’s comps dropped 5.8% and 4%, respectively, in the month, Rite Aid posted comps growth of 3.3%.
Overall, February comps remained soft for most retailers, given the inclement weather conditions which led to slow consumer traffic. Going forward, these retailers are hopeful of better performance, backed by the upcoming Spring season sales and expected robust hiring.
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