Back to top

Analyst Blog

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at or call 800-767-3771 ext.  9339.

We retain Zumiez Inc. (ZUMZ - Analyst Report) on our Underperform list given the company’s soft earnings performance in third-quarter fiscal 2013. The stock currently carries a Zacks Rank #5 (Strong Sell).

Why Underperform?

Zumiez’s third-quarter fiscal 2013 results disappointed as earnings declined 9.8% on a year-over-year basis, while margins remained under pressure due to higher operating expenses from ongoing investments to strengthen its omni-channel selling strategy.

While the company’s comps performance in November and the third quarter impressed following recovery from the continuous decline witnessed in the past few months, its unfavorable fourth-quarter comps and earnings guidance make us skeptical about the company’s future performance. This, in turn, triggered a downward trend in the Zacks Consensus Estimate for the fourth quarter and fiscal 2013, as analysts become less constructive on the stock’s future performance.

Though the company is aggressively implementing strategies to overcome the downward sales trend, we do not see any meaningful improvement in the near term, as evident from the company’s negative comps guidance for the fourth quarter.

Further, we believe that intense competition from rival specialty retailers, the seasonal nature of the business and risks associated with sourcing merchandise from foreign countries may undermine the company’s results.

The company faces intense competition from other teenage-focused retailers as well as sporting goods retailers on the basis of brand recognition, fashion, price, service, store location, and quality. We believe that being in such a competitive industry, Zumiez may find it difficult to execute and implement new business strategies.

Alongside, we believe the company is exposed to significant seasonality risks as it typically generates stronger sales during the third and fourth quarters, which are characterized by the back-to-school and holiday seasons.

Other Stocks That Warrant a Look

While we prefer to avoid Zumiez until we see signs of improvement in the company's performance, other apparel/shoe retailers worth a look are Finish Line Inc. (FINL - Snapshot Report), The Men's Wearhouse Inc. (MW - Snapshot Report) and Deckers Outdoor Corp. (DECK - Analyst Report). All of these have a Zacks Rank #2 (Buy).

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
DIXIE GROUP DXYN 15.84 +7.90%
BOFL HOLDING BOFI 85.30 +4.97%
RAMBUS INC RMBS 12.31 +4.41%
VIPSHOP HOLD VIPS 148.73 +4.35%
NETFLIX INC NFLX 345.74 +4.32%