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1. Company Snapshot

1.a. Company Description

Zumiez Inc., together with its subsidiaries, operates as a specialty retailer of apparel, footwear, accessories, and hardgoods for young men and women.Its hardgoods include skateboards, snowboards, bindings, components, and other equipment.As of February 26, 2022, the company operated 738 stores, including 602 stores in the United States, 52 stores in Canada, 67 stores in Europe, and 17 stores in Australia under the names of Zumiez, Blue Tomato, and Fast Times.


The company also operates zumiez.com, zumiez.ca, blue-tomato.com, and fasttimes.com.au e-commerce websites.Zumiez Inc.was founded in 1978 and is headquartered in Lynnwood, Washington.

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1.b. Last Insights on ZUMZ

Zumiez Inc.'s recent performance was driven by strong comparable sales growth, fueled by pricing gains and robust North America demand. The company's ability to maintain a four-quarter streak of comp sales growth highlights its strategic progress. Additionally, Zumiez's gross margin expansion to 30% was achieved through full-price selling, private label growth, and sharp cost discipline. The company's cost control measures and private label growth have been key drivers of its margin gains, despite facing demand and global headwinds.

1.c. Company Highlights

2. Zumiez Delivers Strong Q3 Earnings, Exceeds Expectations

Zumiez, Inc.'s third-quarter fiscal 2025 earnings conference call highlighted the company's strong performance, with net sales reaching $239.1 million, up 7.5% from $222.5 million in the third quarter of 2024. Gross profit was $89.8 million, up 14.7% compared to $78.3 million in the third quarter of last year, driven by a 7.6% comparable sales growth, marking its sixth consecutive quarter of positive comparable sales growth. Earnings per share reached $0.55 in the quarter, well above the high end of guidance of $0.29 and analyst estimates of $0.27, with actual EPS coming in at $0.55 versus estimates, although some reports indicated $0.46. Operating income was $11.8 million or 4.9% of net sales, compared with operating income of $2.4 million or 1.1% of net sales last year.

Publication Date: Dec -07

📋 Highlights
  • Q3 FY2025 Earnings Outperformed Expectations: Net sales rose 7.5% to $239.1M, gross profit surged 14.7% to $89.8M, and EPS hit $0.55, surpassing guidance of $0.29.
  • Strong Comparable Sales Growth: 7.6% Q3 comp growth, with North America driving double-digit acceleration and six consecutive quarters of positive performance.
  • Full-Year 2025 Optimism: Guidance for 4.5–5% sales growth and EPS of $0.57–$0.67, reversing a $0.09 loss in 2024, with $104.5M in cash and no debt.
  • Private Label Expansion Boosting Margins: Penetration rose 200 bps to 31% of sales, enhancing product margins while maintaining branded product importance.

Business Segment Performance

North American business drove the performance, with comps accelerating to double digits. The company's skate hard goods business appears to have turned around, with cautious optimism about a potential multi-year recovery. The holiday season is a crucial period for skate hard goods, which tends to perform well as a gift-giving category. The company is optimistic about the holiday season, with comparable sales through the past Tuesday up 6.6%, including an 8.7% comp gain over the Black Friday, Cyber Monday period.

Outlook and Guidance

For the fourth quarter, the company expects total sales to be between $291 million and $296 million, representing sales growth of 4% to 6%. For the full year 2025, the company expects total sales growth between 4.5% and 5%, with year-over-year growth in product margin dollars. Analysts estimate next year's revenue growth at 4.6%. The company anticipates earnings per share between $0.57 and $0.67 compared to a loss of $0.09 in 2024.

Valuation and Financial Position

The company's strong financial position is reflected in its cash and current marketable securities of $104.5 million and no debt on the balance sheet. With a P/E Ratio of 57.82, P/S Ratio of 0.58, and ROE of 2.82%, the market appears to be pricing in significant growth expectations. The company's private label penetration has increased by 200 basis points year-over-year to around 31% of total sales, contributing to higher product margins.

Operational Highlights

In North America, the company appears to be gaining market share, primarily by executing well on trend and partnering with brand partners, which has driven AUR growth over the past two years. The company notes that its core customer is a young person looking to individuate and self-express their identity, and that it is focused on hyper-serving this customer. In the November period, transactions were down slightly, but store traffic was decent, with a strong pickup in week 4.

3. NewsRoom

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ZUMZ Stock Gains 14% After Posting Q3 Earnings Beat & Y/Y Comps Growth

Dec -05

Source: zacks.com

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Stock Market Today: Dow Slips, Nasdaq Futures Gain As Investors Await Release Of Fed's Preferred Inflation Data— Netflix, Cooper Cos In Focus

Dec -05

Source: feeds.benzinga.com

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Victoria's Secret, Hewlett Packard Enterprise And 3 Stocks To Watch Heading Into Friday

Dec -05

Source: feeds.benzinga.com

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Zumiez Inc. (ZUMZ) Q3 2026 Earnings Call Transcript

Dec -05

Source: seekingalpha.com

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Zumiez (ZUMZ) Q3 Earnings and Revenues Top Estimates

Dec -04

Source: zacks.com

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Zumiez Inc. Announces Fiscal 2025 Third Quarter Results

Dec -04

Source: globenewswire.com

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Zumiez Might Be Taking A Step In The Right Direction

Dec -02

Source: seekingalpha.com

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Zumiez Inc. to Report Fiscal 2025 Third Quarter Results

Nov -20

Source: globenewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.81%)

6. Segments

Men's Apparel

Expected Growth: 4.78%

Zumiez Inc.'s Men's Apparel segment growth of 4.78% is driven by increasing demand for streetwear and casual wear, particularly among Gen Z consumers. Strong brand partnerships, effective social media marketing, and strategic store expansions also contribute to the growth. Additionally, the company's focus on experiential retail and omnichannel presence enhances customer engagement, further boosting sales.

Accessories

Expected Growth: 4.83%

Zumiez Inc.'s accessories segment growth of 4.83% is driven by increasing demand for action sports and streetwear-inspired fashion, particularly among Gen Z consumers. Strong e-commerce presence, effective marketing strategies, and strategic partnerships with popular brands also contribute to the segment's growth.

Footwear

Expected Growth: 4.83%

Zumiez Inc.'s 4.83% growth in footwear is driven by increasing demand for athletic and casual footwear, particularly among Gen Z and millennials. Strong brand partnerships, effective marketing strategies, and a growing e-commerce platform also contribute to this growth. Additionally, the company's focus on experiential retail and loyalty programs helps to drive sales and customer retention.

Hardgoods

Expected Growth: 4.83%

Zumiez Inc.'s Hardgoods segment growth of 4.83% is driven by increasing demand for action sports equipment, particularly skateboards and bicycles, among Gen Z consumers. Additionally, the company's strategic expansion into new markets, effective inventory management, and strong relationships with suppliers have contributed to this growth.

Women's Apparel

Expected Growth: 4.83%

Zumiez Inc.'s 4.83% growth in Women's Apparel is driven by increasing demand for trendy and comfortable clothing, particularly among Gen Z and millennial consumers. Strong e-commerce presence, effective social media marketing, and strategic partnerships with popular brands also contribute to this growth.

7. Detailed Products

Apparel

Zumiez offers a wide range of apparel products including t-shirts, hoodies, jeans, and more from popular brands such as Supreme, Nike, and Adidas.

Footwear

Zumiez sells a variety of footwear products including sneakers, boots, and sandals from brands like Vans, DC Shoes, and Converse.

Accessories

Zumiez offers a range of accessories including hats, backpacks, watches, and sunglasses from brands like Oakley, The North Face, and GoPro.

Skateboards and Skate Gear

Zumiez sells a variety of skateboards, decks, trucks, wheels, and other skate gear from brands like Tony Hawk, Birdhouse, and Independent.

Surf and Snow Gear

Zumiez offers surfboards, wetsuits, and snowboards from brands like Quiksilver, Billabong, and Burton.

8. Zumiez Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Zumiez Inc. faces moderate threat from substitutes, as customers can opt for online shopping platforms or other retailers offering similar products.

Bargaining Power Of Customers

Zumiez Inc. has a high bargaining power of customers, as they have many options to choose from and can easily switch to competitors.

Bargaining Power Of Suppliers

Zumiez Inc. has a low bargaining power of suppliers, as it has a diverse supplier base and can negotiate prices effectively.

Threat Of New Entrants

Zumiez Inc. faces a moderate threat from new entrants, as it requires significant investment to establish a strong brand presence in the market.

Intensity Of Rivalry

Zumiez Inc. operates in a highly competitive market, with many established players, leading to a high intensity of rivalry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 38.46%
Debt Cost 3.95%
Equity Weight 61.54%
Equity Cost 10.83%
WACC 8.19%
Leverage 62.50%

11. Quality Control: Zumiez Inc. passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Victoria's Secret

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Value: 5.2

Growth: 3.3

Quality: 3.8

Yield: 0.0

Momentum: 6.5

Volatility: 2.3

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Duluth Holdings

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Growth: 1.4

Quality: 4.4

Yield: 0.0

Momentum: 4.0

Volatility: 1.3

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Rent the Runway

A-Score: 3.4/10

Value: 10.0

Growth: 4.3

Quality: 5.1

Yield: 0.0

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Volatility: 0.3

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Torrid

A-Score: 3.0/10

Value: 8.0

Growth: 4.4

Quality: 3.9

Yield: 0.0

Momentum: 0.5

Volatility: 1.0

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Zumiez

A-Score: 2.9/10

Value: 4.4

Growth: 2.1

Quality: 3.9

Yield: 0.0

Momentum: 4.0

Volatility: 3.0

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The Children's Place

A-Score: 2.7/10

Value: 9.8

Growth: 1.0

Quality: 4.5

Yield: 0.0

Momentum: 0.5

Volatility: 0.7

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

29.34$

Current Price

29.34$

Potential

-0.00%

Expected Cash-Flows