Zumiez Records Positive July Comps - Analyst Blog
09 August 2013 - 5:00AM
Zacks
Wash.-based retailer of sports-related teen apparel,
Zumiez Inc. (ZUMZ) reported 0.8% increase in
comparable-store sales for the four weeks ended Aug 3, 2013. This
compares unfavorably with a comps rise of 7.5% for the four weeks
ended Jul 28, 2012. The marginal comps growth was due to rise in
dollars per transaction, partially offset by lower comparable store
transactions.
Net sales for July increased 19.3% to $56.1 million from $47.0
million reported in the year-ago period.
Of late, the company’s comps have been witnessing a declining trend
due to the persistent fall in comparable store transactions.
Looking at the trailing seven months’ performance, we observe that
the company’s comps growth rate has plunged lower every month, with
the exception of April when it rose 4.6% and February, when the
company posted negative 8.9% comps.
Further, the company posted a comps rise of 0.9% in the second
quarter of fiscal 2013 and 0.2% hike in year-to-date comparable
store sales. The reported performance was well within the
company’s earlier guided range of flat to 2% increase. Zumiez is
slated to announce second-quarter 2013 earnings result on Aug 26,
2013.
The company had earlier projected revenues in the range of
$155–$158 million for the second quarter. Based on sales
projections, the company had anticipated earnings per share to be
12–14 cents.
We believe that the company’s well-balanced store expansion and
e-Commerce strategies will drive its top line further. Moreover,
Zumiez aims to increase 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 Aug 3, 2013, the company operated 529 stores, including 495 in
the United States, 27 in Canada and 7 in Europe.
Zumiez currently carries a Zacks Rank #3 (Hold). Other stocks worth
considering among apparel/shoe retailers are The
Children (PLCE), The Gap, Inc. (GPS) and
Citi Trends, Inc. (CTRN). All of them have a Zacks
Rank #2 (Buy).
CITI TRENDS INC (CTRN): Free Stock Analysis Report
GAP INC (GPS): Free Stock Analysis Report
CHILDRENS PLACE (PLCE): Free Stock Analysis Report
ZUMIEZ INC (ZUMZ): Free Stock Analysis Report
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