Zumiez Inc. (ZUMZ”>ZUMZ), an action sports retailer in the United States, reported comparable store sales for the five-week period ended December 31, 2011. Total net sales for the period marked a significant increase of 18.1% to $104.6 million from $88.5 million reported in the five-week period ended January 1, 2011.
During the period under review, comparable store sales surged 10% compared with a rise of 9.2% in the prior-year period. The December results marked the 25th consecutive month of comparable store sales growth.
Bolstered by better-than-expected sales, the company has 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 company’s result was also better than its peer Hot Topic Inc. (HOTT) which recorded a growth of 1.2% in its same store sales during the holiday season (i.e. November and December).
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 entice 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 and a healthy balance sheet augur well for future operating performance.
Currently, Zumiez holds a Zacks #1 Rank, implying a short-term Strong Buy rating on the stock. However, we retain a long-term Neutral recommendation over the stock.
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