), a U.S. specialty retailer with a focus on teenage action-sports
based merchandise, reported a 7.5% hike in comparable store sales
for the four-week period ended July 28, 2012 compared with the
year-ago increase of 4.9%. Net sales for the period surged 21.5% to
$47.0 million from $38.7 million reported in the four-weeks ended
July 30, 2011.
We believe that the company's well-balanced store expansion and
e-commerce strategies will drive its top line further. Zumiez is
currently in the early phase of its store expansion program.
Moreover, it is planning to expand its store network by opening 50
new stores during fiscal 2012, of which 10 would be opened in
Additionally, during the last few years, Zumiez has 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 emerging opportunities.
Moreover, we believe the company's recent acquisition of Blue
Tomato will provide it with broader avenues to strengthen its
international base. Expecting synergies from the acquisition Zumiez
raised its second-quarter sales guidance in the range of $134-$136
million, inclusive of nearly $2 million sales from Blue Tomato.
Earlier, the company was expecting revenue in the range of
However, Zumiez kept its earnings per share guidance unchanged
for second-quarter 2012 at 4-6 cents, inclusive of the
acquisition-related costs and expenses. The current Zacks Consensus
Estimate for the upcoming quarter stands at 13 cents per share,
which is way above the company's guidance range.
Everett, Washington-based 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 span across 2,900 square feet on an average, and
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 hang-out
As of July 30, 2012, the company operated 457 stores in the
United States, 17 stores in Canada and 5 stores in Europe.
Currently, Zumiez carries a Zacks #1 Rank, implying a short-term
Strong Buy rating. Moreover, 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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