Zumiez stock soars after quarterly results blow past estimates, but analysts raise tariff concern

Shares of clothing and accessories retailer Zumiez Inc. ZUMZ, +8.01% soared 8.4% in Monday trading after closing up 11.3% on Friday following second-quarter earnings that blew past expectations. Earnings per share of 36 cents per share beat the 19 cents FactSet forecast, and revenue of $228.4 million exceeded the $224.0 million FactSet expectation. Zumiez Chief Executive Richard Brooks said same-store sales in Europe and Australia were up double digits. And he said speed was a "critical factor" for the results. "We’re already faster than most of our competitors due to our decision over three years ago to shut down our e-commerce fulfillment center and deliver all digital orders out of our stores," he said on the call, according to a FactSet transcript. "Not only does the concept of localized fulfillment mean that we now only have one cost structure to leverage, but we can now get product into customers’ hands faster by reducing the order processing time, cutting down the shipping distance to the customer and also offering in-store pickup." Despite the good news, Wedbush analysts are cautious, calling the stock price acceleration "a key selling opportunity, as the looming potential for adverse and outsized tariff impacts on Zumiez seems mostly overlooked by investors." Analysts estimate that Zumiez would face an annualized EPS headwind of about 35 cents in a "worst-case" tariff scenario. Wedbush rates Zumiez stock underperform with a $17 price target. On the other hand, Baird analysts rate Zumiez shares neutral with a $33 price target and has the stock on its "Fresh Pick" list. Zumiez shares have rallied 73.7% for the year to date while the S&P 500 index SPX, -0.20% is up nearly 19% for the period.

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