Zumiez Inc. ZUMZ reported a decent performance for the nine weeks ending Jan. 4, 2025. However, this leading specialty retailer revised its outlook for the fourth quarter of fiscal 2024, citing softer-than-expected sales during peak holiday weeks.

ZUMZ Registers Comparable Sales Growth

Zumiez reported a 5.6% increase in comparable sales from the prior-year period, which ended on Jan. 6, 2024. In North America, the company saw a stronger performance, with comparable sales increasing 6.9% year over year. Meanwhile, the international markets, including Europe and Australia, experienced modest growth of 1.1%.

Zumiez experienced varied performances across its product categories during the holiday period. The Women’s category led the rise, posting the largest positive increase in comparable sales. The Men’s and Footwear categories followed with solid contributions. On the contrary, Accessories emerged as the weakest-performing category, closely followed by Hardgoods.

ZUMZ Stock Past Three-Month Performance

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Zumiez Revises Q4 Guidance

Despite solid growth in comparable sales, ZUMZ revised its sales and earnings forecasts.

Zumiez now expects fiscal fourth-quarter net sales between $275 million and $277 million, a decline from its earlier mentioned $284-$288 million. Similarly, earnings per share (EPS) for the quarter is projected between 72 cents and 77 cents, a sharp drop from the previously stated 83-93 cents.

One of the factors contributing to this adjustment is the comparison with the previous-year quarter, which included an additional week. This extra week, which was absent in fiscal 2024, is expected to affect year-over-year growth in net sales by 4%.

Nonetheless, Zumiez has been confident that its recent adjustments to merchandise assortments and customer engagement strategies will support improvements in revenues and profitability. The company aims to build on its progress in fiscal 2025, striving to deliver greater value for its shareholders in the long term.

Final Words on ZUMZ

While Zumiez posted solid overall sales gains, it faced softer-than-expected results during the critical holiday shopping period. The adjusted fiscal fourth-quarter outlook reflects these challenges, but ZUMZ's leadership remains confident that strategic changes will fuel growth.

Shares of this Zacks Rank #3 (Hold) company have been struggling on the bourses, declining 26% in the past three months against the Retail-Apparel and Shoes industry's 10.9% growth.

Key Picks

We have highlighted three better-ranked stocks, namely The Gap, Inc. GAP, Abercrombie & Fitch Co. ANF and Deckers Outdoor Corporation DECK.

Gap is a premier international specialty retailer offering a diverse range of clothing, accessories and personal care products. It presently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Gap’s fiscal 2025 earnings and sales indicates growth of 41.3% and 0.8%, respectively, from the fiscal 2024 reported figures. GAP delivered a trailing four-quarter average earnings surprise of 101.2%.

Abercrombie is a specialty retailer of premium, high-quality casual apparel. It currently sports a Zacks Rank of 1.

The Zacks Consensus Estimate for ANF’s fiscal 2025 earnings and sales indicates growth of 69.3% and 15%, respectively, from the fiscal 2024 reported levels. ANF delivered a trailing four-quarter average earnings surprise of 14.8%.

Deckers is a leading designer, producer and brand manager of innovative, niche footwear and accessories. It flaunts a Zacks Rank of 1 at present.

The Zacks Consensus Estimate for DECK’s fiscal 2024 earnings and sales indicates growth of 13.6% and 13.8%, respectively, from the year-ago actuals. DECK delivered a trailing four-quarter average earnings surprise of 41.1%.

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Zumiez Inc. (ZUMZ) : Free Stock Analysis Report

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