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Zumiez in the Red: Easter Holiday Shift Hurts March Comps

The struggles for Zumiez Inc. ZUMZ do not seem to be over yet. Zumiez has been delivering negative comparable-store sales (comps) for a while now, given the slowdown in traffic and absence of defined fashion trends. Additionally, the company is battling headwinds like foreign exchange volatility that is affecting its business in borders and tourist spots.

In fact, Zumiez’s March sales data marked its twelfth straight month of negative comps results. The company posted comps decline of 7.8% for the five weeks ended Apr 2, 2016 against a 5.5% jump witnessed in the prior-year period. The company believes comps in March were mainly affected by the shift in the Easter holiday to March this year from April in the prior year. However, the company expects this to be beneficial for its April comps.

Net sales for Mar 2016 slipped 2.6% to $68.8 million from $70.7 million in the year-ago period. Following the dismal sales for March, the company’s shares fell nearly 8%.

Nevertheless, over the long term, Zumiez is confident about generating profits and boosting shareholder value, backed by its ongoing growth strategies.

This Zacks Rank #3 (Hold) company remains focused on turning its performance around by testing new brands, analyzing every aspect of its business across brands and geographical regions, reviewing its coordinated marketing and product plans, and revisiting its promotional strategies along with the strategic use of private label. Further, the company remains optimistic about its performance in the European market.

Stocks to Consider

Some better-ranked stocks in the same industry include American Eagle Outfitters Inc. AEO and Express Inc. EXPR, both sporting a Zacks Rank #1 (Strong Buy), and Abercrombie & Fitch Co. ANF, holding a Zacks Rank #2 (Buy).

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ZUMIEZ INC (ZUMZ): Free Stock Analysis Report
 
ABERCROMBIE (ANF): Free Stock Analysis Report
 
AMER EAGLE OUTF (AEO): Free Stock Analysis Report
 
EXPRESS INC (EXPR): Free Stock Analysis Report
 
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