Zumiez Shares Jumped: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of teen retailer Zumiez (NAS: ZUMZ) zoomed 11% higher on Thursday after its monthly same-store sales easily topped Wall Street expectations.

So what: The company's same-store sales growth in September was so strong -- 10.1% versus the 3.2% consensus -- that it prompted management to raise its third-quarter outlook. Zumiez shares have been battered in recent months on concerns over slowing growth, but today's results suggest that Mr. Market may have been a little too worried.

Now what: Don't let today's pop prevent you from looking into Zumiez. For the current quarter, management now sees per-share earnings of $0.40-$0.41 on sales of $150 million-$152 million, versus the average analyst estimate of $0.37-$39 on a top line of $149.3 million. And with Zumiez still expected to grow its earnings at a brisk annual rate of 20% over the next five years -- almost twice as fast as peers like American Eagle (NYS: AEO) and Aeropostale (NYS: ARO) -- the long-term doesn't seem too shabby, either.

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At the time thisarticle was published Fool contributor Brian Pacampara owns no position in any of the companies mentioned. The Fool owns shares of Aeropostale. Try any of our Foolish newsletter services free for 30 days.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.

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