Shares of Zumiez Inc.ZUMZ jumped 3.8% in the after-hours trading session yesterday as the company reported improved sales results for the month of September. However, the company's comparable-store sales (comps) continued to disappoint, marking the sixth consecutive month of negative comps.
Zumiez's net sales for the five weeks ended Oct 3, 2015 rose 1.5% to $67.3 million. Comps of this Washington-based sports-related teen apparel retailer fell 1.8% against a 6.6% rise recorded in the prior-year period.
Looking back, this Zacks Rank #5 (Strong Sell) company reported negative comps of 4%, 2.2%, 3.3%, 7.6% and 10.7% for the respective months of April, May, June, July and August.
The company has been struggling to deliver positive comps mainly because of a slowdown in domestic sales due to the absence of defined fashion trends to drive teens. Additionally, the company is battling headwinds like foreign exchange volatility that is affecting its business in borders and tourist spots and delays in receipts due to the West Coast port labor disruptions.
However, prior to April, Zumiez had posted positive comps for 12 months in a row. Comps for the months of January, February and March this year improved 12.3%, 6.9% and 5.5%, respectively.
Over the long term, Zumiez is confident of generating profits and boosting shareholder value based on its ongoing growth strategies. Further, the company remains optimistic about its performance in the European market.
However, while reporting its second-quarter results the company provided a downbeat forecast for the third quarter of fiscal 2015. Management envisions net sales to range from $202-$206 million, while comps are anticipated to decline in the range of 7%-9% over this period. Consequently, the company expects earnings per share for the third quarter to be in the band of 27-31 cents.
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