Zumiez raises Q3 earnings outlook, shares rise
Skate and snow-boarding inspired retailer Zumiez Inc lifted its third-quarter earnings outlook, citing better-than-planned sales and product margins, sending its shares up as much as 8 percent.
Zumiez sees third-quarter earnings of 12 cents to 14 cents a share, up from its previous outlook 5 cents to 7 cents a share.
Analysts on average were looking for a profit of 9 cents a share, before special items, according to Reuters Estimates.
Comparable store sales in September till-date are up 0.8 percent, benefiting from a shift in the Labor Day weekend.
Wedbush Morgan analyst Betty Chen said the same-store sales are very encouraging and may be a positive signal for the holiday season in the fourth quarter.
The mall-based retailer expects sales at stores open at least a year to decline in the high single digits to low double digits for the third quarter ending Oct. 31.
Same-store sales have declined 7.7 percent in the quarter till Sept. 26, the company said. However, Zumiez's footwear segment saw modest positive comparable sales, Chief Financial Officer Trevor Lang said on a pre-recorded call.
Another encouraging sign for the mall-based retailer is that its store base in the U.S. West, which contributes nearly 55 percent of revenue, is showing signs of improvement, analyst Chen said.
Same-store sales declined in the low double digit range in the U.S. West, and fell in the mid single digit range in the South, Midwest and Northeast regions in the quarter till-date, CFO Lang said.
Shares of the Everett, Washington-based Zumiez were up 5 percent at $16.39 Monday morning on Nasdaq. They touched a high of $16.93 earlier in the session.
(Reporting by Viraj Nair in Bangalore; Editing by Anne Pallivathuckal)
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