Zumiez, Inc. (ZUMZ) recently posted its tenth consecutive earnings surprise, but the weak market has keep shares down.
Rising estimates have pushed shares to a Zacks #1 Rank (Strong Buy) and this could be a great entry point.
Company Description
Zumiez makes action sports footwear, apparel and equipment geared toward teens and young adults for sports like skateboarding, surfing, snowboarding, motocross and BMX.
Topped Forecasts
On May 19 Zumiez reported quarterly results that showed a 19% increase in sales, to $106 million and about $1 million higher than expected. Same store sales rose 13%.
Net income for the period was $1.9 million, or $0.06 per share. Analysts were looking for $0.02, giving Zumiez 10 consecutive earnings surprises.
Estimates on the Rise
Guidance for the next quarter was in line with expectations, but analysts are now a bit more bullish. The Zacks Consensus Estimate for the fiscal second quarter is up a penny to $0.05 after a majority of estimates were raised.
While there was some dissention in the quarterly estimates, the annual projections for this year and next year are unanimously higher. In the past 2 months, the average estimate for fiscal 2012 is up 5 cents, to $1.09. Next year’s average rose 4 cents, to $1.30.
Given the $0.88 Zumiez earned in 2011, the projected growth rates are now 24% and 19%.
The Chart
While earnings came in a head of expectations, it looks like the there was a few people selling on the news. However, shares have started to bounce back on higher outlooks from analysts. The market has been week, but if that changes this could prove to be a nice entry point.
Bill Wilton is the Aggressive Growth Stock Strategist for Zacks.com. He is also the Editor in charge of the Zacks Small Cap Trader service
ZUMIEZ INC (ZUMZ): Free Stock Analysis Report
Zacks Investment Research
