The Washington-based retailer of sports-related teen apparel, Zumiez Inc. (ZUMZ), reported a 2.0% improvement in comparable-store sales for the four weeks ended Mar 1, 2014. This compares with a comps decline of 8.9% for the four weeks ended Mar 2, 2013.
Moreover, net sales for February rose 8.8% to $48.4 million from $44.5 million reported in the year-ago period. Sales for the month gained mainly from an improvement of traffic in stores due to the clearance of surplus inventory passed on from the holiday season. This resulted in lowered product margins versus the prior year.
Last month, the company reported dismal comps and sales results due to the weak holiday season and an unfavorable weather. The company reported a 7.6% decline in comparable-store sales for the 4 weeks ended Feb 1, 2014 compared with a 0.6% increase reported for the 5 weeks ended Feb 2, 2013. Net sales for January dipped 24.3% to $38.1 million from $50.3 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 in January, the company guided fourth-quarter sales in the $226–$229 million range last month, 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 61 cents, higher than 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 Mar 1, 2014, the company operated 552 stores, including 512 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), Iconix Brand Group Inc. (ICON) and Skechers USA Inc. (SKX). While Christopher & Banks and Iconix carry a Zacks Rank #1 (Strong Buy), Skechers sports a Zacks Rank #2 (Buy).
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