), a mall-based specialty retailer of action sports allied apparel,
footwear, equipment and accessories, reported better-than-expected
results for first-quarter 2012 on account of improved margins as
well as strong merchandise, store expansion and e-commerce
strategies. Quarterly earnings of 15 cents per share beat the Zacks
Consensus Estimate of 11 cents and surged 150.0% from the
prior-period level of 11 cents.
Net sales in the reported quarter climbed 22.7% to $129.9
million from $105.9 million a year ago. Total revenue was almost in
line with the Zacks Consensus Estimate of $129 million.
First-quarter 2012 comparable store sales at Zumiez were up 12.9%
compared with an increase of 12.6% reported in first-quarter
Cost of goods sold in the quarter increased 20.8% year over year
to $87.8 million. Gross profit margin expanded 110 basis points to
32.4% in the quarter driven by lower costs. Selling, general and
administrative expenses totaled $34.8 million, up 13.7% year over
year. However, as a percentage of net sales, SG&A expenses
contracted 210 basis points to 26.8%.
Consequently, the company's operating income shot up 180.8% to
$7.3 million from the year-ago operating income of $2.6 million.
Operating margin expanded 320 basis points to 5.6% from 2.4% in the
As of April 28, 2012, cash and marketable securities were $171.2
million, a sharp increase of 31.0% from $130.7 million as of April
30, 2011. Total long-term liabilities increased to $36.1million at
quarter end compared with $31.3 million at the end of the
Following solid first-quarter results, Zumiez initiated its
sales and earnings guidance for the second quarter of fiscal 2012.
Management anticipates second-quarter revenue in the range of $128
- $130 million, on the back of a mid-single-digit growth in
comparable store sales. Based on sales projections for the quarter,
the company expects earnings per share to come in the band of 4
cents - 6 cents. The current Zacks Consensus Estimate for the
upcoming quarter stands at 10 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. We
expect Zumiez's focus on teenage action-sports based merchandise
and expanding store network to deliver solid performance in the
However, intense competition from other specialty retailers,
seasonal nature of the business and risks associated with sourcing
merchandise from foreign countries might weigh upon the company's
results. The company competes head-to-head with
Hot Topic Inc.
Pacific Sunwear of California Inc.
We maintain our long-term "Neutral" recommendation on Zumiez.
The quantitative Zacks #1 Rank (short-term Strong Buy rating) for
the company indicates continued success from its growth initiatives
and store expansion efforts.
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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