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Zumiez: The Action Brand for Teens and Students

August 07, 2013 | About:
ABN

ABN

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Zumiez (ZUMZ) is a leading retailer of action sports wear targeting a niche youth market and differentiating itself by offering both apparel and sports equipment. As of May the company operated 503 stores with 475 in the U.S., 22 in Canada and six in Europe.

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The company has grown revenues strongly over the past four years as Zumiez has built its brand and offered products that have strong appeal to the niche market of teens/students whose spend has been less affected by the recession and who continue to buy apparel from main street retailers rather than online. While this adaptable client base may buy everything else online, the importance of fit and the difficulties of returning products means apparel has some protection from Amazon and other online retailers. First quarter results reported a $2 million fall in net income as the company incurred $1.7 million of costs associated with the acquisition of Blue Tomato and comparable store sales fell 0.7%.

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*Consensus earnings forecasts from Yahoo Finance

However consensus earnings forecasts on Yahoo Finance remain positive and point to revenue growth of 10% and earnings growth of 16.8% as this well-run company continues to benefit from strong growth in demand for its products. In order to maintain this the company will have to maintain a low level of product crossover with online retailers, product differentiation and positive in-store customer experiences with engaged staff. So far that hasn’t been a problem.

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Risk Disclaimer: This article does not constitute a recommendation to buy or sell. Investing in stocks or other securities and derivatives is a high risk activity and not suitable for everyone. It is strongly recommended that individuals should consult with a SEC registered investment advisor prior to making any investment decisions.

Disclosure: The author holds no positions in the above mentioned stocks

Rating: 3.8/5 (4 votes)

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