Zumiez Inc. (ZUMZ: 17.75 -0.11 -0.62%), the leading action sports related apparel, footwear, equipment and accessories retailer, reported same-store sales growth of 10.9% for the five-week period ended Jul 3, 2010, driven by an increase in comparable store transactions as well as the combined impact of the shifts in Memorial Day and Fourth of July holidays.Results compared favorably to a same-store sales decrease of 19.3% in the year-ago period. Net sales in the reported period increased 16.4% year-over-year to $37.2 million.
The June results marked the seventh consecutive month of positive same-store sales. Comparable sales growth was driven by an increase in comparable store transactions. Units per transaction as bundling promotions and tiered pricing strategies continue to attract teens.
Zumiez’s same-store sales were positive in all five weeks in June, ranging from 7.2% to 14.6% and were stronger in the back half of the month. The first week posted a same-store sales growth of 10.7% reflecting the shift in Memorial Day from the fourth week of May 2009 to the first week of June 2010.
The fifth week recorded a same-store sales growth of 13.4% due to a shift in the Fourth of July holiday from the last Saturday in June 2009 to the first Sunday in July 2010. The shift in the two holidays provided a low single-digit boost to comparable store sales this June.
By product category, men’s, accessories, boys, and juniors posted positive same-store sales, offset by negative same store sales in the hardgoods and footwear categories. It was a turnaround month for juniors as it turned positive for the first time since late 2007.
Region-wise, same-store sales in the Western half of the United States were up about 10% and up high single-digit in the Midwest, Northeast and South. Internet sales led to the difference in performance.
Results for the five-week period ended Jul 3, 2010, saw a marked improvement over the company’s revenue and same-store sales recorded in May 2010. Zumiez’s net sales for the four-week period ended May 29, 2010, had increased 12.1% to $26.3 million and comparable store sales increased 7.1% compared with a decrease of 20.7% in the comparable year-ago period.
During its first-quarter earnings call, Zumiez introduced guidance of a net loss of approximately 7 cents to 10 cents per share for its second quarter (ending Jul 31, 2010). This includes estimated after-tax charge of 3 cents per share associated with the relocation of the company’s distribution center from Everett, Washington, to Corona, California. Excluding this, the guidance range stands between 4 cents to 7 cents. The Zacks Consensus Estimate for the second quarter currently stands at a loss per share of 4 cents.
Zumiez expects comparable store sales to increase in the mid-to-high single-digit range for the second quarter of fiscal 2010. The company stated that its second quarter same-store sales till date have increased 9.3%. We believe the company is positioned to meet the high end of management’s guidance range for the quarter.
Zumiez has outperformed larger teenage-focused retailers in June compared on a same-store sales basis. Abercrombie & Fitch Co. (ANF: 36.06 +0.61 +1.72%),Aeropostale Inc. (ARO: 28.62 +0.26 +0.92%) and American Eagle Outfitters Inc. (AEO: 12.07 +0.27 +2.29%) reported respective same-store sales of 9%, 8% and 1%.
Zumiez has several strategic initiatives up its sleeve to stimulate top-line performance by accelerating same-store sales growth, opening new high return stores and increasing e-commerce revenue. Zumiez’s focus on teenage action-sports based merchandise, commitment toward expanding store network and a debt-free balance sheet augur well for future operating performance.
Everett, Washington-based Zumiez is a mall-based specialty retailer targeting young men and women in the age group of 12 to 24 years seeking popular brands that represent a lifestyle centered on extreme sports activities. As of Jul 3, 2010, Zumiez operated 389 stores.
No comments:
Post a Comment