After the back-to-school selling season in early September, Zumiez Inc. (ZUMZ) reported a 6.6% rise in comps for the five weeks ended Oct 5, 2014, much ahead of the 2.7% increase projected by analysts. This also compares with the 0.6% rise reported for the five weeks ended Oct 5, 2013.

The company’s net sales for September soared 12.5% to $66.3 million from $58.9 million posted last year. We attribute this increase to the higher back-to-school selling in early September, which gradually slowed down.

Looking at the trailing eight months performance, we note that this WA-based retailer of sports-related teen apparel has been delivering positive comps every month, with the exception of March in which comps dipped 2.9% year over year. Per analysts, Zumiez’s constant focus on its brands instead of promotional activities led to encouraging results.

Further, in second-quarter fiscal 2014, the company’s comps grew 3.4%, against a decline of 0.9% registered in the year-ago quarter, on the back of a rise in comparable-store transactions along with an increase in dollars per transaction.

Net sales for the quarter surged 11.9% year over year to $176.7 million and were above the Zacks Consensus Estimate of $177 million, driven by better-than-expected growth in comps.

For the third quarter of fiscal 2014, the company anticipates revenues in the range of $207–$211 million while comps are expected to be in the low single-digit range.

As for the company’s earnings, Zumiez reported adjusted earnings of 27 cents per share, up 35% year over year and above the Zacks Consensus Estimate of 23 cents. Based on sales projections for the third quarter, the company expects earnings per share in the band of 47–50 cents. The current Zacks Consensus Estimate for the same is pegged at 52 cents a share.

Zumiez currently holds a Zacks Rank #3 (Hold). Better-ranked stocks in the same industry include Citi Trends Inc. (CTRN) and DSW Inc. (DSW), each with a Zacks Rank #1 (strong Buy), and Abercrombie & Fitch Co. (ANF), with a Zacks Rank #2 (Buy).

Read the Full Research Report on ZUMZ
Read the Full Research Report on ANF
Read the Full Research Report on DSW
Read the Full Research Report on CTRN


Zacks Investment Research