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Can Zumiez' (ZUMZ) Positive Comps Trend Drive Q3 Earnings?
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We expect Zumiez Inc. (ZUMZ - Free Report) to beat expectations when it reports third-quarter fiscal 2017 results on Nov 30. Last quarter, the mall-based specialty retailer of action sports-related products delivered a positive earnings surprise of 66.7%.
In fact, the company surpassed estimates in the trailing four quarters with an average positive surprise of 27.1%.
What to Expect?
The question lingering in investors’ minds now is whether Zumiez will be able to post positive earnings surprise in the quarter to be reported. The Zacks Consensus Estimate for the quarter under review is 48 cents per share, reflecting growth of 11.6% from the year-ago quarter. We note that the Zacks Consensus Estimate for the quarter has witnessed an uptrend in the last 30 days. Analysts polled by Zacks anticipate revenues of $242.9 million, up 9.7% from the year-ago quarter.
Moreover, we note that the stock has outperformed the industry in the last three months. The company’s shares have increased 38.3%, while the industry grew 14.3%.
Factors at Play
Zumiez has been riding on robust top and bottom-line surprise trends, alongside solid comps performance in recent months. The company has delivered positive earnings surprise for eight consecutive quarters, while sales topped estimates in six of the last eight quarters. Further, the company has displayed a positive comparable store sales trend for eight consecutive months, after a drop in February. Based on the solid quarter-to-date performance, the company recently raised earnings and sales forecasts for the fiscal third quarter.
Additionally, Zumiez has been gaining from its efforts to keep pace with the evolving retail trends, as evident from its focus on omni-channel development. Its strategic initiatives, authentic lifestyle positioning and commitment to enhancing customer service place it well for market share gains.
The company now anticipates sales in the range of $241-$243 million, compared with the previous guidance of $236-$241 million. Comps growth for the quarter is now anticipated in the 6-7% range. Driven by higher-than-expected sales partly offset by higher operating expenses and slightly lower product margin, the company now projects earnings in the band of 45-48 cents per share. This marks a considerable increase from the prior guidance of 43-48 cents per share.
What the Zacks Model Unveils?
Our proven model shows that Zumiez is likely to beat earnings estimates this quarter. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Earnings ESP of +0.69% and the company’s Zacks Rank #2 makes us reasonably confident of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Other Stocks Poised to Beat Earnings Estimates
Here are some other companies you may want to consider as our model shows that these too have the right combination of elements to post an earnings beat:
American Eagle Outfitters Inc. (AEO - Free Report) has an Earnings ESP of +1.04% and a Zacks Rank #2.
The Kroger Company (KR - Free Report) currently has an Earnings ESP of +3.33% and a Zacks Rank #3.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Image: Bigstock
Can Zumiez' (ZUMZ) Positive Comps Trend Drive Q3 Earnings?
We expect Zumiez Inc. (ZUMZ - Free Report) to beat expectations when it reports third-quarter fiscal 2017 results on Nov 30. Last quarter, the mall-based specialty retailer of action sports-related products delivered a positive earnings surprise of 66.7%.
In fact, the company surpassed estimates in the trailing four quarters with an average positive surprise of 27.1%.
What to Expect?
The question lingering in investors’ minds now is whether Zumiez will be able to post positive earnings surprise in the quarter to be reported. The Zacks Consensus Estimate for the quarter under review is 48 cents per share, reflecting growth of 11.6% from the year-ago quarter. We note that the Zacks Consensus Estimate for the quarter has witnessed an uptrend in the last 30 days. Analysts polled by Zacks anticipate revenues of $242.9 million, up 9.7% from the year-ago quarter.
Zumiez Inc. Price and EPS Surprise
Zumiez Inc. Price and EPS Surprise | Zumiez Inc. Quote
Moreover, we note that the stock has outperformed the industry in the last three months. The company’s shares have increased 38.3%, while the industry grew 14.3%.
Factors at Play
Zumiez has been riding on robust top and bottom-line surprise trends, alongside solid comps performance in recent months. The company has delivered positive earnings surprise for eight consecutive quarters, while sales topped estimates in six of the last eight quarters. Further, the company has displayed a positive comparable store sales trend for eight consecutive months, after a drop in February. Based on the solid quarter-to-date performance, the company recently raised earnings and sales forecasts for the fiscal third quarter.
Additionally, Zumiez has been gaining from its efforts to keep pace with the evolving retail trends, as evident from its focus on omni-channel development. Its strategic initiatives, authentic lifestyle positioning and commitment to enhancing customer service place it well for market share gains.
The company now anticipates sales in the range of $241-$243 million, compared with the previous guidance of $236-$241 million. Comps growth for the quarter is now anticipated in the 6-7% range. Driven by higher-than-expected sales partly offset by higher operating expenses and slightly lower product margin, the company now projects earnings in the band of 45-48 cents per share. This marks a considerable increase from the prior guidance of 43-48 cents per share.
What the Zacks Model Unveils?
Our proven model shows that Zumiez is likely to beat earnings estimates this quarter. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Earnings ESP of +0.69% and the company’s Zacks Rank #2 makes us reasonably confident of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Other Stocks Poised to Beat Earnings Estimates
Here are some other companies you may want to consider as our model shows that these too have the right combination of elements to post an earnings beat:
Dollar General Corp. (DG - Free Report) currently has an Earnings ESP of +1.46% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
American Eagle Outfitters Inc. (AEO - Free Report) has an Earnings ESP of +1.04% and a Zacks Rank #2.
The Kroger Company (KR - Free Report) currently has an Earnings ESP of +3.33% and a Zacks Rank #3.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>