Comparable-store sales (comps) of Zumiez Inc. – the Washington-based retailer of sports-related teen apparel – declined 8.9% for the 4-weeks ended Mar 2, 2013, compared with an increase of 14.2% in the 4-weeks ended Feb 25, 2012.
However, net sales for the month surged 10.6% to $44.5 million from $40.2 million reported in the year-ago period.
Last month (5-weeks ended Feb 2, 2013), Zumiez reported comps increase of 2.6% compared with an increase of 11.1% in the 5-weeks ended Feb 4, 2012. Net sales for the period surged 57.9% to $50.3 million from $31.8 million reported in the year-ago period.
This Zacks Rank #2 (Buy) company is scheduled to report its fourth quarter and fiscal 2012 earnings on Thursday, Mar 14, 2013. Along with its January comps, Zumiez had earlier reported preliminary fourth quarter sales of $224.2 million, which was above its guidance range of $218.0–$221.0 million.
Further, the company anticipates fourth quarter earnings in the range of 65 cents – 66 cents per share. The current Zacks Consensus Estimate is pegged at 73 cents per share, well above the company’s guidance range.
We believe that the company’s well-balanced store expansion and e-Commerce strategies will drive its top line further. Following 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. As of Mar 2, 2013, the company was operating 501 stores.
Moreover, the recent acquisition of Blue Tomato facilitated Zumiez to tap the European market. Such initiatives provide the company with a solid platform to effectively capitalize on the emerging opportunities.
Though Zumiez’s overall performance and store expansion strategies are well appreciated, there is slight apprehension surrounding its future comparable-store sales performances following the recent weak comps growth.
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.