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