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Zumiez (ZUMZ) Posts Favorable Comparable Sales in March

Mall-based specialty retailer, Zumiez Inc.ZUMZ reported increase in March comps following a decline in the month of February. The company recorded a rise of 1.1% in comps for the five-week period ended Apr 1, 2017 as against a 7.8% decline witnessed in the five weeks ended Apr 2, 2016.

Further, net sales for the same period (Mar 2017) grew 4.3% to $71.7 million from $68.8 million in the year-ago period.

However, not much movement was witnessed in after-hours trading session yesterday. However, the Zacks Rank #4 (Sell) company's stock has declined 22.5% in the past one month, underperforming the Zacks categorized Retail - Apparel/Shoe industry's decrease of 7.3%.

The sharp decline in share price in the past one month is primarily due to dismal outlook provided for first-quarter fiscal 2017. The company expects net sales for the quarter in the range of $178-$182 million, while comps growth is expected in the range of flat to 2% growth.

Further, consolidated operating margins are projected to range from negative 4% to negative 5%. Finally, the company projects a loss of 17-21 cents per share for the first quarter.

Management's cautious stance weighed upon the Zacks Consensus Estimate for the first quarter, which has been trending downwards since the earnings announcement. In the past 30 days, the Zacks Consensus Estimate for first-quarter fiscal 2017 has declined to a loss of 18 cents from a loss of 3 cents. In the same time frame, earnings estimate for fiscal 2017 has decreased 11.3% to $1.02 per share.

Nevertheless, we note that the company's strategic initiatives, focus on omni-channel growth, authentic lifestyle positioning and commitment to customer service position bode well.

Apart from Zumiez, Costco Wholesale Corporation COST came up with March comps results. Comps for the five-week period ended Apr 2, 2017 increased 6%.

Stocks to Consider

Better-ranked stocks worth considering in the retail sector include Kate Spade & Company KATE and Foot Locker, Inc. FL . Both these stocks carry a Zacks Rank #2 (Buy).You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

Kate Spade & Company has surpassed the Zacks Consensus Estimate of earnings in two of the trailing four quarters, with an average beat of 14.6%.

Foot Locker has long-term earnings growth rate of 9.7%.

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Zumiez Inc. (ZUMZ): Free Stock Analysis Report

Foot Locker, Inc. (FL): Free Stock Analysis Report

Kate Spade & Company (KATE): Free Stock Analysis Report

Costco Wholesale Corporation (COST): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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