Zumiez Inc. (ZUMZ) is currently trading at a low price-to-sales (P/S) multiple, which is below the averages of both the Zacks Retail-Apparel and Shoes industry and the broader Retail-Wholesale sector. With a forward 12-month P/S of 0.44, ZUMZ is priced lower than the industry's average of 1.08 and the sector's average of 1.46.This makes ZUMZ stock undervalued relative to its industry peers, presenting an attractive opportunity for investors seeking exposure to the retail apparel sector. Furthermore, Zumiez’ ...

Company Overview - Zumiez Inc. is a leading global lifestyle retailer specializing in apparel, footwear, and accessories, with a focus on the rapidly changing apparel industry [10] - The company is making significant investments to integrate digital and physical channels to enhance the shopping experience for consumers [10] Investment Insights - Zumiez has a Zacks Rank of 3 (Hold) and a VGM Score of A, indicating a solid position in the market [11] - The Momentum Style Score for Zumiez is B, with shares having increased by 2.3% over the past four weeks [11] - Two analysts have revised their earnings estimates higher for fiscal 2025, with the Zacks Consensus Estimate increasing by $0.12 to $0.08 per share [11] - Zumiez has an average earnings surprise of 48.9%, suggesting strong performance relative to expectations [11] Conclusion - With a solid Zacks Rank and strong Momentum and VGM Style Scores, Zumiez is recommended for investors' consideration [12]

Core Viewpoint - Zumiez Inc. (ZUMZ) is experiencing strong upward momentum in its stock performance, trading above key moving averages, indicating positive market sentiment and investor confidence in its financial health and growth prospects [1][2]. Financial Performance - ZUMZ's stock price has increased by 36.2% over the past year, outperforming the Zacks Retail-Apparel and Shoes industry's growth of 27.2%, the broader Retail-Wholesale sector's 24.2%, and the S&P 500 index's 25.7% [3]. - In the second quarter, total sales grew by 8.1% year over year to $210.2 million, driven by a 10.4% increase in the North American market [6]. - Comparable sales rose by 3.6%, supported by higher average unit retail prices and an increase in units sold per transaction [6]. - Gross profit improved to $71.8 million in the second quarter, with a gross margin of 34.2%, up 250 basis points from the previous year [7]. Strategic Initiatives - The company is focusing on a customer-centric business model, strong brand partnerships, and cost management, which have contributed to positive results [5]. - Zumiez is expanding its private label offerings, which accounted for 23% of sales in fiscal 2023, appealing to value-conscious consumers [7]. - In Europe, the company is optimizing existing store productivity and shifting towards full-price selling, which has improved merchandising margins [8]. Challenges - International sales, particularly in Europe, declined by 2.6% year over year to $33.9 million in the second quarter, with a 7.6% drop in international comparable sales [10]. - The shift to full-price selling in a challenging retail environment has raised concerns about growth in key international markets [10]. Future Outlook - Zumiez forecasts third-quarter sales between $221 million and $225 million, reflecting a 2-4% year-over-year increase, with comparable sales up 12.1% through early September [11]. - The company anticipates low single-digit sales growth for fiscal 2024, supported by stable revenue and ongoing cost efficiencies [11]. - Despite challenges in international markets, Zumiez's strategic focus on cost management and efficiency improvements positions it for sustained profitability [13].

Shares of Zumiez Inc. (ZUMZ) have experienced a remarkable surge over the past six months. The stock has rallied 47.7% against the Zacks Retail-Apparel and Shoes industry's sharp 5.2% decline. The company's strong second-quarter performance, strategic initiatives and focus on cost management have positioned it for continued success. Its customer-centric approach, investments in private label brands and operational efficiency have enabled it to outperform both the broader Retail-Wholesale sector and the S&P ...

Company Performance - Zumiez shares have increased by 8.5% over the past month and reached a new 52-week high of $31.37, with a year-to-date gain of 31.2% compared to 11.2% for the Zacks Retail-Wholesale sector and 4.9% for the Zacks Retail - Apparel and Shoes industry [1] - The company has a strong record of positive earnings surprises, not missing earnings consensus estimates in the last four quarters, reporting an EPS of $-0.04 against a consensus estimate of $-0.33 in the latest earnings report [2] - For the current fiscal year, Zumiez is expected to post earnings of -$0.03 per share on revenues of $879.87 million, reflecting a 97.32% change in EPS and a 0.5% change in revenues [3] Future Earnings Projections - For the next fiscal year, Zumiez is projected to earn $0.73 per share on revenues of $907.81 million, indicating a year-over-year change of 2541.67% in EPS and 3.18% in revenues [3] Valuation Metrics - Zumiez currently holds a Value Score of B, a Growth Score of B, and a Momentum Score of C, resulting in a VGM Score of A [6] - The stock has a Zacks Rank of 1 (Strong Buy) due to favorable earnings estimate revisions from analysts, suggesting potential for further price appreciation [7][8] Industry Comparison - The Retail - Apparel and Shoes industry is positioned in the top 35% of all industries, indicating favorable conditions for both Zumiez and its peer, Shoe Carnival, Inc. [11] - Shoe Carnival, Inc. has a Zacks Rank of 2 (Buy) and is expected to post earnings of $2.65 per share on revenues of $1.24 billion for the current fiscal year, with shares gaining 1.7% over the past month [9][10]

Core Insights - Zumiez Inc. reported better-than-expected second-quarter fiscal 2024 results, with a narrower loss of 4 cents per share compared to the Zacks Consensus Estimate of a loss of 33 cents per share and an improvement from a loss of 44 cents per share in the prior year [1][9] - Total net sales reached $210.2 million, exceeding the Zacks Consensus Estimate of $202 million and reflecting an 8.1% increase from $194.4 million in the prior-year quarter [2] Sales Performance - North America net sales improved by 10.4% year over year to $176.3 million, while international sales declined by 2.6% to $33.9 million [4] - Comparable sales rose 3.6%, driven by higher dollars per transaction, although offset by fewer transactions [3] - The men's category was the largest contributor to comparable sales growth, followed by women's and footwear, while hardgoods and accessories saw significant declines [5][6] Margins and Costs - Gross profit increased by 16.4% year over year to $71.8 million, with gross margin expanding by 250 basis points to 34.2% [7] - Selling, general and administrative (SG&A) expenses remained flat at $72.2 million, but as a percentage of sales, they decreased by 280 basis points to 34.4% [8] Financial Health - As of August 3, 2024, Zumiez had cash and current marketable securities of $127 million, down from $140 million a year earlier, with no debt reported [10] - Total shareholders' equity was $319.8 million, and inventory decreased by 1.3% year over year to $158.8 million [11] Future Guidance - For the fiscal third quarter of 2024, Zumiez anticipates net sales growth of 7-9% when adjusting for the retail calendar shift, with projected sales between $221 million and $204 million [19][20] - The company expects total sales growth in the low single-digit range for fiscal 2024, with an increase in product margin and a return to positive operating margins [21] Recent Performance - Net sales for the fiscal third quarter-to-date rose 6.8% compared to the same period last year, with North America sales climbing 7.8% [14][15] - Comparable sales for the four weeks ending September 2, 2024, increased by 12.1%, with North America up 14.4% [16]

Core Viewpoint - Zumiez delivered better-than-expected second-quarter earnings, with shares surging 12.2% following the report [1] Group 1: Financial Performance - Comparable sales increased by 3.6%, driving revenue up 8.1% to $210.2 million, surpassing estimates of $202 million [2] - Gross margin expanded by 250 basis points to 34.2%, reducing the loss per share from $0.44 a year ago to $0.04, which was better than the expected loss of $0.33 [3] - The company expects third-quarter revenue between $221 million and $225 million, reflecting a 2%-4% increase, or a 7%-9% increase when adjusted for the retail calendar shift [5] Group 2: Sales Trends and Outlook - Sales trends showed noticeable acceleration, with July comparable sales in North America increasing in the high single digits [3] - Quarter-to-date comparable sales for the third quarter were up 12.1%, with net sales for the first 30 days up 6.8% [4] - The company anticipates a strong back-to-school season, indicating positive momentum heading into the holiday season [4][6]

Company Performance - Zumiez reported a quarterly loss of $0.04 per share, significantly better than the Zacks Consensus Estimate of a loss of $0.33, and an improvement from a loss of $0.44 per share a year ago, representing an earnings surprise of 87.88% [1] - The company posted revenues of $210.18 million for the quarter ended July 2024, exceeding the Zacks Consensus Estimate by 4.07% and up from $194.44 million in the same quarter last year [2] - Over the last four quarters, Zumiez has surpassed consensus EPS estimates four times and has also topped consensus revenue estimates in the same period [2] Stock Outlook - Zumiez shares have increased approximately 30% since the beginning of the year, outperforming the S&P 500's gain of 15.7% [3] - The current consensus EPS estimate for the upcoming quarter is $0.23 on revenues of $216.91 million, while the estimate for the current fiscal year is -$0.04 on revenues of $879.87 million [7] - The estimate revisions trend for Zumiez is currently favorable, leading to a Zacks Rank 2 (Buy) for the stock, indicating expected outperformance in the near future [6] Industry Context - The Retail - Apparel and Shoes industry, to which Zumiez belongs, is currently ranked in the top 39% of over 250 Zacks industries, suggesting a positive outlook for stocks within this sector [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Second Quarter Comparable Sales Increased 3.6% Second Quarter Gross Margin increased 250 basis points to 34.2% Second Quarter Loss Per share improved to ($0.04) from ($0.44) Third Quarter-to-date Comparable Sales up 12.1% LYNNWOOD, Wash., Sept. 05, 2024 (GLOBE NEWSWIRE) -- Zumiez Inc. (NASDAQ: ZUMZ) a leading specialty retailer of apparel, footwear, equipment and accessories for young men and women, today reported results for the second quarter ended August 3, 2024. Net sales for the second quarter ended Au ...

Financial Performance - Net sales for the three months ended August 3, 2024, were $210.2 million, an increase of $15.8 million or 8.1% compared to $194.4 million for the same period in 2023[64] - Comparable sales increased by 3.6% for the three months ended August 3, 2024, driven by an increase in dollars per transaction[65] - Gross profit for the three months ended August 3, 2024, was $71.8 million, an increase of $10.1 million or 16.4%, with gross profit as a percentage of net sales rising to 34.2%[66] - Net sales for the six months ended August 3, 2024, were $387.6 million, an increase of $10.3 million or 2.7% compared to $377.3 million for the same period in 2023[69] - Comparable sales for the six months ended August 3, 2024, increased by 0.8%, driven by an increase in dollars per transaction[70] - Gross profit for the six months ended August 3, 2024, was $123.7 million, an increase of $12.7 million or 11.4%, with gross profit as a percentage of net sales rising to 31.9%[71] - The net loss for the six months ended August 3, 2024, was $17.6 million, or $0.91 loss per diluted share, compared to a net loss of $26.9 million, or $1.40 loss per diluted share, for the same period in 2023[73] Expenses and Cash Flow - Selling, general and administrative expenses for the three months ended August 3, 2024, were $72.2 million, remaining flat compared to the same period in 2023, but as a percentage of net sales decreased to 34.4%[67] - Selling, general and administrative (SG&A) expenses increased by $1.3 million, or 0.9%, to $144.2 million for the six months ended August 3, 2024, with SG&A as a percent of net sales decreasing by 70 basis points to 37.2%[72] - Net cash used in operating activities decreased by $8.8 million to $15.4 million for the six months ended August 3, 2024, from $24.3 million for the same period in 2023[77] - Net cash provided by investing activities was $15.9 million for the six months ended August 3, 2024, primarily due to $6.3 million of capital expenditures for new store openings and remodels, offset by $22.2 million in net sales of marketable securities[78] - Net cash used in financing activities for the six months ended August 3, 2024, was $19.4 million, primarily related to the repurchase of common stock[79] Capital Expenditures and Future Outlook - The company expects to spend approximately $14.0 million to $16.0 million on capital expenditures in fiscal 2024, primarily for leasehold improvements and fixtures for about 7 new stores[76] - Future capital requirements will depend on factors such as the pace of new store openings and the availability of suitable locations[75] Risks and Challenges - The increase in sales was affected by continued inflationary pressures on consumers and competition for discretionary spending[64] - A decrease in consumer traffic could lead to lower than expected sales, impacting financial results significantly[93] - North America growth strategy relies on optimizing customer engagement and may strain resources, potentially affecting overall business performance[94] - International expansion plans include risks related to different competitive conditions and consumer preferences, which could negatively impact operations[95] - Acquisitions, such as Blue Tomato and Fast Times, may face integration challenges that could divert capital and management attention, affecting financial performance[97] - Increased labor costs, including minimum wage and healthcare, could adversely impact operating profit and overall financial condition[107] - Fluctuations in foreign currency exchange rates may materially affect financial results as international operations expand[105] - The company is exposed to risks from raw material cost fluctuations, which could adversely impact gross profit and overall financial performance[104] - Relationships with vendors are crucial; deterioration could lead to supply issues and negatively affect business operations[112] - Weather conditions and climate change may unpredictably impact sales and operational results[114] - The business is susceptible to unseasonable weather conditions, which could materially adversely affect operations and inventory compatibility[115] - The company relies heavily on key executives for performance; losing them could hinder growth objectives and management capabilities[116] - Staffing challenges, particularly in retail, could impact the ability to implement growth strategies and operational efficiency[117] - A decline in cash flows from operations could adversely affect the company's ability to fund operations and growth strategies[118] - The company operates a single distribution center in the U.S. and relies on various international centers, making it vulnerable to disruptions from unforeseen events[119] - Risks associated with terrorism and violence in shopping malls could lead to decreased consumer traffic and sales[120] - The company faces potential litigation risks that could result in significant costs and impact financial performance[122] - Fluctuations in tax obligations and effective tax rates may lead to volatility in operating results[126] - The company may fail to meet analyst and investor expectations, potentially causing stock price declines[127] - Increased scrutiny regarding environmental, social, and governance (ESG) practices may result in additional costs or risks[130]