), a U.S. Specialty retailer with a focus on teenage action-sports
based merchandise, reported an increase of 8.2% in comparable store
sales for the five-week period ended June 30, 2012 compared with
the comparable prior-year increase of 9.8%.
Net sales for the period surged 18% to $51.3 million from $43.5
million reported in the five weeks ended July 2, 2011. An increase
in sales was primarily driven by better performance at the
company's men's wear, footwear, juniors, and accessories
categories. However, Zumiez reported weaker sales in its boy's
We believe 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 and
plans to enlarge its network by opening 50 new stores during fiscal
2012, including its 10 new stores in Canada.
Additionally, in the recent years, Zumiez has launched stores
averaging 3,000 square feet, which enables it to offer extended
merchandise without compromising store ambience. These initiatives
provide the company with a strong platform to effectively
capitalize on the emerging opportunities.
Moreover, we believe the company's recent acquisition of Blue
Tomato will provide Zumiez 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
$128 to $130 million.
However, the company kept its earnings per share guidance
unchanged at 4 cents to 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 age group of 12 to 24 years, who seek popular brands that
represent a lifestyle centered on extreme sports activities. The
company competes head-to-head 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
hang-out destinations. As of June 30, 2012, the company operated
453 stores in the United States and 15 stores in Canada.
Currently, Zumiez carries a Zacks #2 Rank, implying a short-term
Buy rating on the stock. We retain our 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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