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Zumiez (ZUMZ) Looks Good on Its Customer-Centric Efforts
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The fashion and apparel space looks quite upbeat, thanks to the mass inoculation and relaxation in the pandemic-led restrictions. The renowned apparel and accessories retailer Zumiez Inc. (ZUMZ - Free Report) seems well poised to capitalize on the trends in the apparel space on the back of its one-channel concept and advanced in-store fulfillment capabilities. The company is strongly focused on building a customer-centric business model apart from offering differentiated assortments. Its store-expansion effort to tap higher sales also seems commendable.
Concerted Efforts
Zumiez’s one-channel approach to retail is effectively catering to changing consumer needs. This includes ideas, such as the company’s in-store fulfillment capabilities including Zumiez delivery. The implementation of advanced technology helped it enrich customers’ shopping experience across diverse channels. Further, the company is boosting competitive advantage by investments in logistics, planning and allocation and omni-channel capabilities, which position it well for growth.
Zumiez, which shares space with Abercrombie (ANF - Free Report) , Boot Barn (BOOT - Free Report) and Gap (GPS - Free Report) , is constantly making investments to boost localized merchandising assortments. The company’s solid efforts to meet robust demand with respect to the distinct merchandise offering continue to significantly contribute to its performance. The men’s accessories and footwear categories are performing outstandingly.
In addition, Zumiez looks forward to expanding in the underpenetrated markets. It allocates a major portion of its capital expenditure to store remodeling and opening projects. In fiscal 2021, management intends to open 22 stores comprising about five stores in North America, 12 in Europe and five in Australia. Simultaneously, it plans to close five to six stores during the current fiscal year. For fiscal 2021, management expects to incur capital expenditures in the band of $20-$22 million, indicating a rise from $9.1 million spent in fiscal 2020.
What’s Ahead?
On its last earnings call on Sep 9, management informed that third-quarter fiscal 2021 is off to a strong start on the back of a more normalized back-to-school shopping season. It also expects to retain a strong momentum heading into the holidays, given the flexibility of its business model.
For the second half of fiscal 2021, Zumiez anticipated surpassing the fiscal 2020 sales levels. For fiscal 2021, management projected net sales to increase between high teens and above 20% from the fiscal 2020 level and in low-mid teens from the fiscal 2019 reading.
For the back half, it guided sales growth above the 2020 levels. For both the third and the fourth quarters, management forecasts sales growth in the mid- to high-single digit range from the fiscal 2020 tally. The fiscal 2021 gross margin is likely to grow year over year on leveraged occupancy costs stemming from higher sales and lower shipping costs as web revenues normalize with opened stores and expanded product margins.
Wrapping up, the company’s robust strategies to offer customers the best coupled with a healthy balance sheet, sturdy business model and a strong brand presence position Zumiez well for long-term success.
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Zumiez (ZUMZ) Looks Good on Its Customer-Centric Efforts
The fashion and apparel space looks quite upbeat, thanks to the mass inoculation and relaxation in the pandemic-led restrictions. The renowned apparel and accessories retailer Zumiez Inc. (ZUMZ - Free Report) seems well poised to capitalize on the trends in the apparel space on the back of its one-channel concept and advanced in-store fulfillment capabilities. The company is strongly focused on building a customer-centric business model apart from offering differentiated assortments. Its store-expansion effort to tap higher sales also seems commendable.
Concerted Efforts
Zumiez’s one-channel approach to retail is effectively catering to changing consumer needs. This includes ideas, such as the company’s in-store fulfillment capabilities including Zumiez delivery. The implementation of advanced technology helped it enrich customers’ shopping experience across diverse channels. Further, the company is boosting competitive advantage by investments in logistics, planning and allocation and omni-channel capabilities, which position it well for growth.
Zumiez, which shares space with Abercrombie (ANF - Free Report) , Boot Barn (BOOT - Free Report) and Gap (GPS - Free Report) , is constantly making investments to boost localized merchandising assortments. The company’s solid efforts to meet robust demand with respect to the distinct merchandise offering continue to significantly contribute to its performance. The men’s accessories and footwear categories are performing outstandingly.
In addition, Zumiez looks forward to expanding in the underpenetrated markets. It allocates a major portion of its capital expenditure to store remodeling and opening projects. In fiscal 2021, management intends to open 22 stores comprising about five stores in North America, 12 in Europe and five in Australia. Simultaneously, it plans to close five to six stores during the current fiscal year. For fiscal 2021, management expects to incur capital expenditures in the band of $20-$22 million, indicating a rise from $9.1 million spent in fiscal 2020.
What’s Ahead?
On its last earnings call on Sep 9, management informed that third-quarter fiscal 2021 is off to a strong start on the back of a more normalized back-to-school shopping season. It also expects to retain a strong momentum heading into the holidays, given the flexibility of its business model.
For the second half of fiscal 2021, Zumiez anticipated surpassing the fiscal 2020 sales levels. For fiscal 2021, management projected net sales to increase between high teens and above 20% from the fiscal 2020 level and in low-mid teens from the fiscal 2019 reading.
For the back half, it guided sales growth above the 2020 levels. For both the third and the fourth quarters, management forecasts sales growth in the mid- to high-single digit range from the fiscal 2020 tally. The fiscal 2021 gross margin is likely to grow year over year on leveraged occupancy costs stemming from higher sales and lower shipping costs as web revenues normalize with opened stores and expanded product margins.
Wrapping up, the company’s robust strategies to offer customers the best coupled with a healthy balance sheet, sturdy business model and a strong brand presence position Zumiez well for long-term success.