Zumiez Inc. (ZUMZ), an action sports retailer in the United States, reported comparable store sales for the four-week period ended January 28, 2012. Total net sales for the period marked a significant increase of 19.2% to $31.8 million from $26.7 million reported in the four-week period ended January 29, 2012.
During the period under review, comparable store sales surged 10.8%, beating the analysts expectations compared with a rise of 15.3% in the prior-year period. The January results marked the 26th consecutive month of comparable store sales growth.
The company also registered a growth of 9.7% in comparable sales during fourth-quarter 2011 compared with an increase of 13% during prior-year quarter. Zumiez’s comparable sales for full fiscal 2011 also increased by 8.7% compared with 11.9% growth registered in previous fiscal.
The company’s result was also better than its peer Hot Topic Inc. (HOTT), which recorded a growth of 1.3% and 0.6% in same store sales during the fourth quarter and fiscal 2011, respectively, compared with negative 2.1% and 5.3% registered in fourth quarter and fiscal 2010.
Zumiez has raised its sales and earnings guidance range during the release of December 2011 comparable sales result. The company raised its fourth-quarter 2011 sales guidance in the range of $180 – $181 million from $174 – $177 million forecasted earlier.
Moreover, based on the prediction of a high-single-digit growth in comparable store sales, Zumiez now expects fourth-quarter 2011 earnings to be in the range of 57 cents to 58 cents per share, instead of the previously announced guidance range of 52 cents to 54 cents. The current Zacks Consensus Estimate stands at 58 cents, in line with the company’s higher end guidance range.
Zumiez is a mall-based specialty retailer of action-sports related apparel, footwear, equipment, and accessories. The company targets young men and women in the age group of 12 to 24 years, who seeks popular brands that represent a lifestyle centered on extreme sports activities.
Zumiez’s stores span across 2,900 square feet on an average, and feature couches and video game stations to attract customers to shop for extended periods. These stores are strategically located near busy areas of the mall, such as food courts, movie theatres, music/game stores and other popular teenage hang-out destinations.
Moreover, Zumiez’s niche focus on teenage action-sport based merchandise, commitment toward store expansion along with a healthy balance sheet augur well for future operating performance.
Currently, Zumiez holds a Zacks #1 Rank, implying a short-term Strong Buy rating. However, we retain a long-term Neutral recommendation on the stock.
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