Jefferies Expects Continued Strong Results From Zumiez (ZUMZ)

Jefferies is out with its research report on Zumiez ZUMZ after ZUMZ reported 3Q EPS of 40c, 3c higher than the Jefferies/consensue estimate. In a note to clients, Jefferies writes, "ZUMZ raised its 3Q10 outlook 2x in the quarter, and the quarter ended nearly double the company's original guidance. Sales trends are accelerating and margins rising with tailwinds clearly at the company's back. We think a combination of disciplined inventory management and a upturn in the actions sport category are driving results. We think ZUMZ strong trends should continue over the next few quarters especially. Look for continued rising EPS and sales bias here especially as ZUMZ is well positioned with little direct competition in the mall." Jefferies maintains its Hold rating and increases its price target from $23 to $30 on ZUMZ. ZUMZ closed yesterday at $31.57.