Zumiez Inc. (NASDAQ: ZUMZ)
Among other retail companies set to report earnings for the third quarter, shares of Zumiez reported on Thursday, December 3rd 2015 after the market close. Retail companies in general have been reporting earnings across the board from blowout winners to blowout losers. Unfortunately for Zumiez, they fell into the latter of these two categories.
In Thursday’s regular trading session shares fell $1.04 or 6.96% to $13.90. However, in the after-hours trading session shares were down an additional 13.81% to $11.98.
ZUMZ Earnings
Shares fell nearly 13% in the aftermarket trading when the company reported lower same store sales and weaker profit margins. The company, which is very popular among active lifestyle people who indulge in things ranging from skateboards to snowboarding to bicycling and motocross felt the effects of changing sales trends in the sporting sector.
“Zumiez’s third-quarter profit dropped to $9.7 million or $0.36 per share from $15.7 million or $0.54 per share last year. On average, 16 analysts polled by Thomson Reuters expected earnings of $0.29 per share for the quarter. Analysts’ estimates typically exclude special items. Net sales for the quarter were $204.3 million, down 4.2 percent from $213.3 million last year. Analysts had a consensus revenue estimate $204.03 million for the quarter. Looking forward, the company expects earnings of about $0.40 to $0.46 per share on sales of $226 million to $231 million. Analysts currently expect earnings of $0.63 per share on revenues of $254.66 million for the quarter. Zumiez expects fourth-quarter same-store sales to decrease 14 to 16 percent.”-Nasdaq.com
A more positive note included in the earnings report was the fact that the company authorized the repurchase of up to an additional $70 million dollars worth of its outstanding common stock.
Technicals
In the accompanying chart you will see the daily price action from the beginning of 2015 until the present. Please note the downward trend line showing successive lower prices since the beginning of the year. The green arrows represent where the company‘s shares have found support on a horizontal line, but after today’s earnings announcement shares have penetrated that trend line and violated it severely. It will be interesting to see how tomorrow’s trading action ensues and how it winds up closing. Many active traders will be watching this one closely.
Company Comments
“We’ve moved quickly to reduce expenses to protect profitability in the face of challenging sales trends, which helped us exceed our bottom line guidance for the third quarter. With the fourth quarter off to a slow start combined with tougher sales comparisons ahead, we believe it’s prudent to maintain a cautious outlook for the remainder of fiscal 2015 and we are focused on managing expenses and inventory levels during this difficult time.” Briefing.com
About Zumiez Inc.
Zumiez Inc. operates as a multi-channel specialty retailer of apparel, footwear, accessories and hardgoods. The companys stores focuses on the skateboarding, snowboarding, surfing, motocross, and bicycle motocross for young men and women. Its hardgoods include skateboards, snowboards, bindings, components, and other equipment. As of May 30, 2015, the company operated 627 stores, including 567 in the United States, 38 in Canada, and 22 in Europe under the names Zumiez and Blue Tomato; and www.zumiez.com and www.blue-tomato.com ecommerce websites. Zumiez Inc. was founded in 1978 and is headquartered in Lynnwood, Washington. YahooFinance
