Wash.-based retailer of sports-related teen apparel, Zumiez Inc. reported a 1.1% increase in comps for the 4-weeks ended Jun 1, 2013. This compares to a comps rise of 13.7% reported for the 4-weeks ended May 26, 2012. Net sales for May surged 16.7% to $43.6 million from $37.4 million reported in the year-ago period.
Of late, the company’s comps have been witnessing a declining trend due to the continued fall in comparable store transactions. Looking at the trailing five months performance, we note that the company’s comps have been increasing at a declining rate every month, with exceptions to April where it rose 4.6% and February where the company posted negative 8.9% comps.
Further, this Zacks Rank #3 (Hold) company reported comps decline of 0.7% in the first-quarter fiscal 2013 compared with an increase of 12.9% reported in the year-ago quarter. The company’s comps suffered due to a decline in comparable store transactions, offset by an increase in dollars per transaction, which mainly benefited from a higher average per unit retail price and year-over-year increase in units per transaction.
Net sales for the quarter increased 14.3% to $148.5 million from $129.9 million in the comparable last-year quarter. The year-over-year growth in revenues was primarily driven by excellent full price selling for the combined March/April month, offset by a decline in comps. Quarterly sales were almost in line with the Zacks Consensus Estimate of $148.0 million.
Looking in to the second quarter of fiscal 2013, the company anticipates revenues in the range of $155–$158 million, while comps are likely to range from flat to a 2% increase.
Now coming to earnings, Zumiez reported adjusted earnings of 13 cents per share in the first-quarter, marginally surpassing the Zacks Consensus Estimate of 12 cents but declining 20% from 15 cents earned in the year-ago quarter. Bottom-line results benefited from the successful execution of its long-term growth strategies and the strength of its extremely distinguished and varied assortments.
Based on sales projections for the second-quarter, the company expects earnings per share to come in the band of 12–14 cents.
We believe that the company’s well-balanced store expansion and e-Commerce strategies will drive its top line further. Treading on the footsteps of its competitors such as Abercrombie & Fitch Company (ANF - Free Report) and Foot Locker Inc. (FL - Free Report) , Zumiez is targeting to augment 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, comprising 9 stores in Canada and 6 in Europe. As of Jun 1, 2013, the company operated 509 stores, including 479 in the United States, 23 in Canada and 7 in Europe.
Dealing in action sports-related apparel, footwear, equipment and accessories, Zumiez, which competes primarily with Hot Topic Inc. , targets young men and women in the 12–24 year age group who seek popular lifestyle brands centered on extreme sports activities.