We expect the Washington-based retailer of sports-related teen
) to beat expectations when it reports second-quarter 2014 results
on Sep 4.
Why a Likely Positive Surprise?
Our proven model shows that Zumiez may beat earnings because it has
the right combination of two key components.
Positive Zacks ESP:
Zumiez currently has an
of +4.55%. This is because the Most Accurate estimate stands at 23
cents per share, while the Zacks Consensus Estimate is pegged at 22
Zacks Rank #2 (Buy):
Note that stocks with a Zacks Rank #1, 2 and 3 have a higher chance
of beating earnings. The Sell-rated stocks (#4 and 5) should never
be considered going into an earnings announcement.
The combination of Zumiez's Zacks Rank #2 and Earnings ESP of
+4.55% makes us confident of a positive earnings beat.
What is Driving Better-than-Expected Earnings?
Zumiez Inc. is a mall-based specialty retailer of action-sports
related apparel, footwear, equipment and accessories. The company's
strategy of offering action sports merchandise focused on young
adults, both men and women aged 12 to 24 years, has enabled it to
carve a distinct niche for itself.
Zumiez posted better-than-expected first-quarter fiscal 2014
earnings driven by strong top-line performance due to the
successful execution of its long-term growth strategies and the
strength of its distinguished and varied assortments. With a
positive surprise of 100% in the first quarter, the company has now
surpassed the Zacks Consensus Estimate 24 times in the past 26
quarters. We expect the company to keep up this trend of posting
positive earnings surprises in the years ahead, based on its focus
on boosting productivity at existing stores, developing a leading
omni-channel platform and enhancing its presence both domestically
Our view is backed by the company's positive comps performance and
encouraging sales and earnings guidance for the second quarter of
fiscal 2014. Management anticipates second-quarter revenues in the
range of $167-$171 million, while comps are expected to be in the
range of negative low single-digits to flat. Further, the company
expects earnings per share in the range of 12-16 cents for the
Zumiez has topped the Zacks Consensus Estimate in the trailing four
quarters with an average positive surprise of 41.4%. In the last
concluded quarter, the company's earnings were double the Zacks
Other Stocks to Consider
Zumiez is not the only firm looking up this earnings season. The
following companies are also likely to beat earnings in the
Limoneira Company (
) has an Earnings ESP of +12.50% and a Zacks Rank #2.
Calavo Growers Inc. (
) has an Earnings ESP of +2.17% and a Zacks Rank #3 (Hold).
Quanex Building Products Corporation (
) with an Earnings ESP of +4.76% and a Zacks Rank #3.
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