Zumiez Zooms On Guidance Bump, Sales Growth

Zumiez Inc. ZUMZ impressed the Street when it announced a 7.9-percent increase in same-store sales in December versus 3.4-percent year-ago comparison.

The Analyst

William Blair's Sharon Zackfia maintains an Outperform rating on Zumiez's stock.

The Thesis

Zumiez' 7.9-percent same-store sales increase in December came in "well ahead" of the roughly 4-percent estimate the Street was modeling, Zackfia said in a research report. (See the analyst's track record here.)  

The specialty retailer's full quarter comp is now expected to come in at about 7 percent, which is also above management's own guidance of 3 to 5 percent. The men's category remained the strongest positive contributor to comps throughout December, while accessories was the largest negative contributor, Zackfia said. 

Zumiez's 17-month streak of positive transactions was partly offset by a decrease in dollars per transaction, the analyst said. The company has recorded positive monthly comps in each month since March 2017.

Momentum should accelerate in 2018 and drive EPS growth on more "constrained" SG&A growth, Zackfia said. 

Zumiez's fashion shoe business could be well-positioned to take advantage of a shift in consumer preference away from basketball shoes, Zackfia said. There are "early signs" that the company's footwear business "could be at a positive inflection point," she said. 

Price Action

Shares of Zumiez gained more than 14 percent Thursday morning and hit a new 52-week high of $24.44. Zumiez was trading up 12.44 percent at $23.05 at the time of publication. 

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