A month has gone by since the last earnings report for Zumiez (ZUMZ). Shares have added about 24.2% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Zumiez due for a pullback? Before we dive into how investors and analysts have reacted as of late, let’s take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Zumiez Q2 Earnings Beat, Sales Rise Y/Y, Stock Up
Zumiez Inc. came out with second-quarter fiscal 2020 results, wherein both the top and the bottom lines not only beat the Zacks Consensus Estimate but also improved year over year driven by the gradual reopening of stores. Notably, this specialty retailer of apparel, footwear and accessories swung back to profit, following a loss in the preceding quarter.
Results in Detail
Zumiez posted quarterly earnings of $1.01 per share that comfortably surpassed the Zacks Consensus Estimate of 34 cents, and rose significantly from 36 cents reported in the year-ago period. Higher net sales and cost containment efforts undertaken to withstand the coronavirus crisis drove the bottom line.
To address challenges related to the pandemic, Zumiez suspended hiring, eliminated all planned bonuses for fiscal 2020, delayed most of the merit increases, curbed capital spend, extended payment terms for vendor invoices, and reduced inventory receipts by canceling or delaying orders. Management has also been minimizing operating costs, which comprise travel, marketing and other non-essential items, and reducing store labor to reflect restricted operating hours.
Net sales increased 9.6% year over year to $250.4 million and beat the Zacks Consensus Estimate of $234 million, in spite of stores being open fewer days than the year-ago period. During the quarter, stores were open for 73.4%