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Wash.-based retailer of sports-related teen apparel, Zumiez Inc. (ZUMZ - Analyst Report) reported a 0.6% decline in comparable-store sales for the five weeks ended Oct 5, 2013. This compares with a comps rise of 5.6% for the five weeks ended Sep 26, 2012.

Net sales for September dipped 6.0% to $58.9 million from $62.7 million reported in the year-ago period.

Of late, the company’s comps have been increasing at a declining rate due to the persistent fall in comparable store transactions. Analyzing the trailing 6 months performance, we note that the company’s comps have been increasing at a declining rate every month, with the exception of August when it rose 3.0%.

Further, the company posted comps increase of 0.9% for second-quarter 2013 compared with an increase of 9.5% reported in the year-ago quarter.  Net sales increased 16.9% year over year to $157.9 million. Quarterly sales were almost in line with the Zacks Consensus Estimate of $158.0 million.

Going forward, the company anticipates third-quarter revenues in the range of $187–$191 million, while comps are likely to range from flat to a 2% increase.

Based on sales projections for the quarter, the company expects earnings per share to be 39–43 cents. The earnings expectation also includes estimated charges of 4 cents related to the Blue Tomato acquisition. Operating margin is anticipated to be in the range of 10–11%.

We believe that the company’s well-balanced store expansion and e-Commerce strategies will drive its top line further. Moreover, Zumiez aims to increase its store network to 600–700 stores in the long run.

The company plans to expand its store base by opening 58 new stores in fiscal 2013, which includes 9 stores in Canada and 5 in Europe. As of Oct 5, 2013, the company operated 542 stores, including 505 in the United States, 28 in Canada and 9 in Europe.

Zumiez currently carries a Zacks Rank #5 (Strong Sell). Stocks worth considering among apparel/shoe retailers are Citi Trends Inc. (CTRN - Analyst Report), DSW Inc. (DSW - Snapshot Report) and Christopher & Banks Corporation (CBK - Snapshot Report). All of these have a Zacks Rank #1 (Strong Buy).

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