Through The Fly's Eyes: Zumiez
Larry Schutts is a contributing editor for Theflyonthewall.com span> and the Vice-President of Stockwinners.com.
Zumiez: Gear For The Action Sports Crowd
If your idea of the best way to travel involves an Arbor Fish longboard, or a Burton Chopper, then there is an outfit in Everett, Washington that has your basics and all your accessories, too.
Zumiez (ZUMZ) is a mall-based specialty retailer of sports-related apparel and equipment. Apparel offerings carry such brand names as Billabong, Burton, Hurley and Quiksilver, as well as private labels. The equipment includes skateboards, snowboards, boots, bindings, and miscellaneous novelties. Stores cater to young people, between the ages of 12 and 24. The firm operates 266 outlets, in 22 states.
Zumiez pleased investors last week, when it announced Q2 EPS of 11 cents and revenues of $82 million. Analysts had been expecting 8 cents and $79.3 million. Management also guided FY08 EPS to 97-99 cents (97 cent consensus). The news helped pop the shares out of a mid-August "cup" into the late August "handle" of a Cup & Handle formation. The price is now showing signs of completing the pattern with a bullish rise from the right-hand side of the "handle."
Brokers recommend the shares with five "strong buys," four "buys" and four "holds." Analysts see a 29% average annual growth rate, through the next five years. The ZUMZ Sales Growth rate (46.95%), EPS Growth rate (83.33%), Return on Assets (14.03%), Return on Investment (19.61%) and Return on Equity (22.12%) compare favorably with industry, sector and S&P 500 averages. Institutional investors hold about 91% of the outstanding shares. Over the past 52 weeks, the stock has traded between $20.00 and $48.10. A stop-loss of $39.00 looks good here.