Zumiez Earnings Preview

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Investors are on the edge of their collective seats, hoping that Zumiez (NAS: ZUMZ) will top analyst expectations for the fifth consecutive quarter. The company will unveil its latest earnings on Wednesday, Aug. 31. Zumiez is a mall-based specialty retailer of sports-related apparel, footwear, equipment and accessories operating under the Zumiez brand name.

What analysts say:

  • Buy, sell, or hold?: Analysts don't like Zumiez as much as competitor Wet Seal overall. Six out of seven analysts rate Wet Seal a buy compared to nine of 20 for Zumiez. Analysts still rate the stock a hold, but they are a bit more wary about it compared to three months ago.
  • Revenue forecasts: On average, analysts predict $112.2 million in revenue this quarter. That would represent a rise of 14.8% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is earnings of $0.05 per share. Estimates range from $0.03 to $0.07.

What our community says:
CAPS All-Stars are solidly backing the stock with 94.4% giving it an "outperform" rating. The community at large backs the All-Stars with 92.4% granting it a rating of "outperform." Fools are keen on Zumiez and haven't been shy with their opinions lately, logging 336 posts in the past 30 days. Despite the majority sentiment in favor of Zumiez, the stock has a middling CAPS rating of three out of five stars.

Management:
The company upped its gross margin by 2.7 percentage points in the last quarter. Revenue rose 18.8% while cost of sales rose 14.3% to $72.4 million from a year earlier.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters.

Quarter

Q1

Q4

Q3

Q2

Gross Margin

31.6%

39.0%

39.0%

31.4%

Operating Margin

2.4%

15.4%

14.0%

(2.4%)

Net Margin

1.8%

9.6%

9.1%

(1.2%)

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At the time this article was published

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