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Zumiez (ZUMZ) in Investors' Good Books: Time to Buy Stock?
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Mall-based specialty retailer, Zumiez Inc. (ZUMZ - Free Report) is currently enjoying a favorable place in the investors’ book. The company earned this coveted spot on the back of its strong earnings trends, recent revival of comparable sales (comps) trend, impressive growth strategies and financial strength. These factors have aided it to gain the Zacks Rank #2 (Buy) and carry a Value Style Score of “B”.
Moreover, the company’s shares have surged 13.6% in the past one year, outperforming the Zacks categorized Retail-Apparel/Shoe industry that witnessed a decline of 12.9% in the same period. Moreover, the shares have returned about 16.6% in the last six months compared with the broader industry’s decline of 8.8%.
What’s Aiding the Stock Performance?
We attribute the growth in the Zumiez’s stock price, particularly in the last six months, to the renewed comps trend since Sep 2016. The turnaround came after the company’s 17-month long trend of posting negative comps and dismal sales results.
Recently, the company reported a 3.4% increase in comps for the five week period ended Dec 31, 2016 compared with an 8.9% decline witnessed in the five-weeks ended Jan 2, 2016. This marks the company’s fourth straight month of positive comps growth. Further, net sales for the Christmas holiday month (Dec 2016) increased 6.8% to $143.6 million from $134.5 million in the year-ago period.
Coming to the company’s earnings trend, Zumiez has outperformed the Zacks Consensus Estimate in five straight quarters now, with an average beat of 30.9% in the trailing four quarters. Further, sales have topped estimates in the last five quarters. In the last reported third-quarter fiscal 2016, bottom line gained from a robust top line and efficient cost management, while sales were fueled by solid comps and store additions, which also included stores of the recently acquired Fast Times.
Moreover, the company’s strategic initiatives focused on omni-channel growth, authentic lifestyle positioning and commitment to customer service, position it well for gaining market share. The company also remains committed to the strategy of optimizing its store base through expansion in the underpenetrated markets, by either repositioning or closing underperforming stores through constant evaluation, aimed at maximizing long-term productivity.
Further, Zumiez is striving to expand its eCommerce and omni-channel platforms to provide consumers with the facility of quick and easy access to its products and brands. We believe that the company’s well-balanced store expansion and eCommerce strategies are likely to drive top-line growth.
Last but not the least, the company enjoys immense financial strength as evident from its ability to generate solid cash flows, which aids in the execution of long-term strategies as well as its store growth plans. Moreover, its commitment to shareholders is clear from its practice of returning them excess cash via share buybacks. As of the end of the third quarter, the company had shares worth $33.9 million remaining under its standing authorization.
We believe the aforementioned strategic actions along with its solid earnings trend position Zumiez for further growth. Moreover, the company has a long-term EPS growth rate of 15%.
Children’s Place, with a long-term earnings growth rate of 10.3%, has surged nearly 56% in the past one year.
Tilly’s, with a long-term earnings growth rate of 13%, has recorded a whopping growth of 92.6% in the last one year.
Foot Locker has jumped 6.7% in the past one year. The stock has a long-term earnings growth rate of 9.7%.
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Zumiez (ZUMZ) in Investors' Good Books: Time to Buy Stock?
Mall-based specialty retailer, Zumiez Inc. (ZUMZ - Free Report) is currently enjoying a favorable place in the investors’ book. The company earned this coveted spot on the back of its strong earnings trends, recent revival of comparable sales (comps) trend, impressive growth strategies and financial strength. These factors have aided it to gain the Zacks Rank #2 (Buy) and carry a Value Style Score of “B”.
Moreover, the company’s shares have surged 13.6% in the past one year, outperforming the Zacks categorized Retail-Apparel/Shoe industry that witnessed a decline of 12.9% in the same period. Moreover, the shares have returned about 16.6% in the last six months compared with the broader industry’s decline of 8.8%.
What’s Aiding the Stock Performance?
We attribute the growth in the Zumiez’s stock price, particularly in the last six months, to the renewed comps trend since Sep 2016. The turnaround came after the company’s 17-month long trend of posting negative comps and dismal sales results.
Recently, the company reported a 3.4% increase in comps for the five week period ended Dec 31, 2016 compared with an 8.9% decline witnessed in the five-weeks ended Jan 2, 2016. This marks the company’s fourth straight month of positive comps growth. Further, net sales for the Christmas holiday month (Dec 2016) increased 6.8% to $143.6 million from $134.5 million in the year-ago period.
Coming to the company’s earnings trend, Zumiez has outperformed the Zacks Consensus Estimate in five straight quarters now, with an average beat of 30.9% in the trailing four quarters. Further, sales have topped estimates in the last five quarters. In the last reported third-quarter fiscal 2016, bottom line gained from a robust top line and efficient cost management, while sales were fueled by solid comps and store additions, which also included stores of the recently acquired Fast Times.
Zumiez Inc. Price, Consensus and EPS Surprise
Zumiez Inc. Price, Consensus and EPS Surprise | Zumiez Inc. Quote
Moreover, the company’s strategic initiatives focused on omni-channel growth, authentic lifestyle positioning and commitment to customer service, position it well for gaining market share. The company also remains committed to the strategy of optimizing its store base through expansion in the underpenetrated markets, by either repositioning or closing underperforming stores through constant evaluation, aimed at maximizing long-term productivity.
Further, Zumiez is striving to expand its eCommerce and omni-channel platforms to provide consumers with the facility of quick and easy access to its products and brands. We believe that the company’s well-balanced store expansion and eCommerce strategies are likely to drive top-line growth.
Last but not the least, the company enjoys immense financial strength as evident from its ability to generate solid cash flows, which aids in the execution of long-term strategies as well as its store growth plans. Moreover, its commitment to shareholders is clear from its practice of returning them excess cash via share buybacks. As of the end of the third quarter, the company had shares worth $33.9 million remaining under its standing authorization.
We believe the aforementioned strategic actions along with its solid earnings trend position Zumiez for further growth. Moreover, the company has a long-term EPS growth rate of 15%.
Other Stocks to Consider
Some other favorably placed stocks in the same industry include The Children’s Place Inc. (PLCE - Free Report) , Tilly’s Inc. (TLYS - Free Report) , both sporting a Zacks Rank #1 (Strong Buy), and Foot Locker Inc. (FL - Free Report) , carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Children’s Place, with a long-term earnings growth rate of 10.3%, has surged nearly 56% in the past one year.
Tilly’s, with a long-term earnings growth rate of 13%, has recorded a whopping growth of 92.6% in the last one year.
Foot Locker has jumped 6.7% in the past one year. The stock has a long-term earnings growth rate of 9.7%.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest tickers for the entirety of 2017?
Who wouldn't? These 10 are painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Be among the very first to see them >>