Recs

0

Why Zumiez Inc. Shares Plunged Today

What happened

Shares of Zumiez Inc. (NASDAQ: ZUMZ  ) were heading lower once again today after the apparel retailer posted weak guidance in its fourth-quarter earnings report. As of 12:41 p.m. EST, the stock was down 14.4%.

So what

Zumiez actually topped estimates during the key holiday quarter, as comparable sales increased 5.1%, following a 9.5% drop in sales at established stores in the year-ago quarter.

A Zumiez store inside a mall

Image source: The Motley Fool.

Overall sales increased 8.7% to $263.6 million, beating expectations at $261.7 million, while earnings per share improved from an adjusted $0.53 a year ago to $0.74, ahead of the consensus at $0.66.

CEO Rick Brooks said that "performance exceeded expectations driven by efficiencies in omnichannel and localization efforts," and that the tax rate fell from 37.3% to 35.3%, which also boosted earnings.

Now what

Despite the strong fourth-quarter performance, Zumiez guidance was lacking as Brooks noted headwinds in the industry. Comparable sales turned negative in February, slipping 3.1%, but the company projected comparable-sales growth of 0% to 2% in the first quarter, and called for total revenue of $178 million to $182 million. However, that was short of estimates at $184.6 million.

On the bottom line, management said it expected a loss per share of $0.21 to $0.17, much worse than expectations of a loss of $0.03.

Considering the struggles of the overall apparel retail industry and Zumiez's inability to deliver consistent comparable-sales growth, investors are probably best off avoiding this stock.

10 stocks we like better than Zumiez
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and Zumiez wasn't one of them! That's right -- they think these 10 stocks are even better buys.

Click here to learn about these picks!

*Stock Advisor returns as of February 6, 2017


Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 4008010, ~/Articles/ArticleHandler.aspx, 3/23/2017 12:14:35 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
Change up DOW 20731.6 70.3 0.3%
Change up S&P 500 2356.7 8.2 0.4%
Change up NASD 5837.8 16.1 0.3%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

3/23/2017 11:57 AM
ZUMZ $17.45 Up +0.70 +4.18%
Zumiez CAPS Rating: **

Article registration testing
VISIBLE INTERNALLY ONLY AND ONLY WORKS WITH UNREGISTERED VISITORS

Revisit this page

Clear article's cache and revisit this page

Or, visit the current page, forcing Test ID to article:interrupt:106919 and

Tookie Value = 03536424991419968317071593974671

Advertisement