LYNNWOOD, Wash. - Zumiez Inc . (NASDAQ: NASDAQ:ZUMZ), a prominent retailer of youth apparel and accessories with a market capitalization of $361 million, reported a 5.6% increase in comparable sales for the nine-week period ending January 4, 2025, as compared to the same period in the previous year. According to InvestingPro data, the company's stock appears slightly undervalued at its current price of $18.81, despite facing profitability challenges in recent quarters. Despite this growth, the company has revised its fourth-quarter revenue forecast downward from the previously stated $284 million to $288 million range to a new estimate of $275 million to $277 million.
The retailer, which operates 745 stores globally, experienced varied performance across different regions and product categories. North America led with a 6.9% increase in comparable sales, while other international regions, including Europe and Australia, saw a modest 1.1% rise. The company maintains a healthy financial position with a current ratio of 1.87, indicating strong liquidity to meet short-term obligations. Within product divisions, the Women’s category showed the most significant growth, followed by Men’s and Footwear, while Accessories and Hardgoods did not perform as well.
Rick Brooks, CEO of Zumiez, acknowledged that the company's sales for the first two months of the fiscal fourth quarter were solid but fell short of their expectations, particularly during the crucial holiday shopping period. He stated, "We achieved solid, mid-single-digit comparable sales growth for the first two months of our fiscal fourth quarter, however this result was below our planned comparable sales for the quarter."
The company also adjusted its earnings per share (EPS) expectations for the quarter, now predicting a range between $0.72 and $0.77, compared to the prior guidance of $0.83 to $0.93. The fiscal fourth quarter of 2023 included an additional week, which the company notes will negatively impact year-over-year growth rates by approximately 4%, a factor considered in the updated guidance.
Despite the revised forecast, Brooks expressed confidence in the company's recent adjustments to merchandise assortments and customer engagement strategies, positioning Zumiez for potential top and bottom-line gains in fiscal 2025. InvestingPro analysis reveals that while the company faced challenges with a negative earnings yield in recent quarters, analysts project a return to profitability this year. For deeper insights into Zumiez's financial health and growth prospects, investors can access comprehensive analysis and additional ProTips through InvestingPro's detailed research reports.
Zumiez Inc. operates under various brand names, including Zumiez, Blue Tomato, and Fast Times, and maintains an online presence through multiple e-commerce websites. This article is based on a press release statement from Zumiez Inc.
In other recent news, Zumiez Inc. outperformed expectations with its third-quarter earnings. The company reported an adjusted earnings per share of $0.06, surpassing the projected $0.03 and marking a significant improvement from last year's loss of -$0.12 per share. Revenue increased by 2.9% year-over-year to $222.5 million, falling slightly short of the consensus estimate of $222.85 million.
Comparable sales for the quarter rose by 7.5%, indicating robust consumer demand for the company's products. The gross margin also expanded by 140 basis points to 35.2%, contributing to the earnings beat. The firm's strategic initiatives led to a noticeable increase in sales trends, as per CEO Rick Brooks.
Looking forward, Zumiez provided an upbeat revenue guidance of $284-288 million for the fourth quarter, surpassing the analyst consensus of $283.5 million. However, the company anticipates earnings per share between $0.83 and $0.93 for the quarter, which is below the $1.01 consensus estimate. In the early days of the fourth quarter, Zumiez reported a 10% increase in total sales compared to the same period last year. The company also plans to open one more store, bringing the total new store count to 7 for fiscal 2024, while expecting to close approximately 33 stores by year-end.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.