Comparable store sales (comps) of the Washington-based retailer
of sports-related teen apparel,
), increased 5.6% for the five-weeks ended September 29, 2012,
compared with an increase of 10.1% in the five-weeks ended October
1, 2011. Net sales for the period surged 18.6% to $62.7 million
from $52.9 million reported in the year-ago period.
Comps for the nine-weeks ended September 29, 2012, jumped 4.6%
against a 6.8% increase recorded in the year-ago period.
Looking ahead, the company forecasts third quarter comps to
increase in the 3% to 5% range, while net sales are expected in the
range of $181 million to $185 million. Based on sales projections
for the quarter, the company expects earnings per share to come in
the band of 42 cents- 45 cents. The earnings expectation also
includes the estimated costs and expenses of 6 cents and 3 cents
per share related to the Blue Tomato acquisition and inventory
Operationally, Zumiez's Blue Tomato business continues to show
positive year-over-year growth. Though the projections from Blue
Tomato are expected to slightly impact the company's third quarter
earnings, this business is expected to be accretive to the
company's fourth quarter results. Overall, the company expects the
Blue Tomato acquisition to provide it with broader avenues to
strengthen its international base.
We believe that the company's well-balanced store expansion and
e-commerce strategies will drive its top line further. The
company's store expansion plans remain on track as the company
nears its target of opening 50 new stores during the fiscal 2012,
of which 10 are to be opened in Canada.
As of September 29, 2012, the company operated a total of 489
stores, including 466 in the United States, 18 in Canada and 5 in
During the last few years, Zumiez launched stores averaging 3,000
square feet, which enabled it to offer extended merchandise without
compromising on the store ambience. These initiatives provide the
company with a strong platform to effectively capitalize on
Dealing in action sports related apparel, footwear, equipment, and
accessories, Zumiez targets young men and women in the 12 to 24
year age group who seek popular lifestyle brands centered on
extreme sports activities. The company competes with
Hot Topic Inc.
Pacific Sunwear of California Inc.
Zumiez's stores offer 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
Currently, Zumiez carries a Zacks #3 Rank, implying a short-term
Strong Hold rating. However, we maintain a long-term Outperform
recommendation on the stock.
HOT TOPIC INC (HOTT): Free Stock Analysis
PAC SUNWEAR CAL (PSUN): Free Stock Analysis
ZUMIEZ INC (ZUMZ): Free Stock Analysis Report
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