Zumiez (ZUMZ), a U.S. action sports retailer, reported comparable store sales for the five-week period ended October 1, 2011. Total net sales for the period increased by a sharp 18.3% to $52.9 million from $44.7 million reported in the five-week period ended October 2, 2010.
For the reported period, comparable store sales surged 10.1% compared with a rise of 17.0% in the prior-year period. The September results marked the 22nd consecutive month of comparable store sales growth.
Bolstered by better-than-expected sales, the company has raised its third-quarter 2011 sales guidance to $152.0 million from $150.0 million forecasted earlier. Moreover, based on the prediction of a mid-single-digit growth in comparable store sales, Zumiez now expects third-quarter 2011 earnings to be in the range of 40 cents to 41 cents per share, instead of previously announced guidance range of 37 cents to 39 cents.
Prior to this, Zumiez reported second-quarter 2011 earnings of 8 cents a share, beating the Zacks Consensus Estimate of 5 cents a share. The company also outpaced earnings of 2 cents a share posted in the second quarter of fiscal 2010. Net income from operations was $2.6 million compared with $1.9 million in the prior-year quarter.
Net sales in the reported quarter climbed 14.9% year over year to $112.2 million from $97.7 million a year ago. Comparable store sales rose 7.5% in the quarter compared with an increase of 9.3% in second-quarter 2010.
Zumiez is a mall-based specialty retailer of action-sports related apparel, footwear, equipment and accessories. The company targets young men and women in the age group of 12 to 24 years, seeking popular brands that represent a lifestyle centered on extreme sports activities.
Zumiez’s stores span across 2,900 square feet on an average, and feature couches and video game stations to entice customers to shop for extended periods. These stores are strategically located near busy areas of the mall, such as food courts, movie theatres, music/game stores and other popular teenage hang-out destinations.
Zumiez, which competes with Hot Topic Inc. (HOTT), Pacific Sunwear of California Inc. (PSUN) and Wet Seal Inc. (WTSLA), currently, holds a Zacks #3 Rank, implying a short-term Hold rating on the stock. This corresponds with our long-term Neutral recommendation on the stock.
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