Zumiez Sales Whoosh

Zumiez Inc. (ZUMZ), an action sports retailer in the United States, reported comparable store sales for the four-week period ended April 30, 2011. Total net sales for the period increased a sharp 24.8% to $32 million from $25.7 million reported in the four-week period ended May 1, 2010.

For the reported period, comparable store sales shot up 17.5% compared with a rise of 2.1% in the prior-year period. The April results marked the 17th consecutive month of comparable store sales growth.

Hot Topic Inc. (HOTT), which competes with Zumiez, reported a robust growth of 10.5% in April comparable store sales, with total sales increasing 9.2%, reversing a series of declines.

Zumiez reported fourth-quarter 2010 earnings of 49 cents a share, beating the Zacks Consensus Estimate of 47 cents. The company also outpaced earnings of 33 cents a share posted in the fourth quarter of 2009. Net income from operations was $15 million compared with $10.6 million in the prior-year quarter.

Net sales in the most recent quarter increased 17.9% year over year to $156.2 million from $132.4 million a year ago. Comparable store sales rose 13.0% in the quarter compared with a decrease of 1.7% in fourth-quarter 2009. Total revenue fell slightly short of the Zacks Consensus Estimate of $157 million.

For the first quarter of 2011, management expects comparable store sales to increase in the mid-to-high, single-digit range and net loss to range from 3 cents per share to breakeven.

Zumiez is a mall-based specialty retailer of action-sports related apparel, footwear, equipment, and accessories. The company targets young men and women in the age group of 12 to 24 years, who seek popular brands that represent a lifestyle centered on extreme sports activities.

Zumiez’s stores span across 2,900 square feet on an average, and feature couches and video game stations to entice customers to shop for extended periods. These stores are strategically located near busy areas of the mall, such as food courts, movie theatres, music/game stores and other popular teenage hang-out destinations.

Zumiez, which competes with Pacific Sunwear of California Inc. (PSUN) and Wet Seal Inc. (WTSLA), currently holds a Zacks #3 Rank, implying a short-term Hold rating on the stock. This corresponds with our long-term Neutral recommendation on the stock.

HOT TOPIC INC (HOTT): Free Stock Analysis Report

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