Zumiez Modestly Raising Estimates on Better-Than-Expected March Sales

Zumiez’s March sales were better than Street projections, with comps down 2.9% against a 2.1% year-ago comparison, better than our and consensus projection for a midsingle-digit decline. As a result, Zumiez’s quarter-to-date comp decline of 0.8% is at the better end of management’s guidance for a full-quarter comp decrease in the low-single-digit range.

Category trends were similar to recent months, with accessories, hardgoods and juniors’ positive while footwear, men’s and boys’ were negative. As expected given the Easter shift into April, transactions declined during March, while dollars per transaction also declined (lower AUR partly offset by increased UPT).

Looking forward, the shift of Easter should benefit April, during which we project a 1% comp decline against a tougher 4.6% comparison. As a result, we project a fullquarter comp decline of 0.9% against a 4.6% comparison.

Given better-than-expected quarter-to-date sales, we are raising our first-quarter adjusted EPS estimate by a penny, to $0.03, versus guidance of $0.00 to $0.05 and in line with consensus. For the full year, our estimate remains $1.55, predicated on a 1.0% to 1.5% comp gain, up 5% and modestly ahead of consensus of $1.53.


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