Investing to Wealth

Zumiez Inc. (NASDAQ: ZUMZ)

Zumiez Inc. (ZUMZ) is a mall-based specialty retailer of action sports related apparel, footwear, equipment and accessories operating under the Zumiez brand name. As of January 31, 2009, the Company operated 343 stores primarily located in shopping malls, giving it a presence in 31 states. ZUMZ’s stores cater to young men and women between the ages of 12 and 24 who seek brands representing a lifestyle centered on activities that include skateboarding, surfing, snowboarding, bicycle motocross (BMX) and motocross. Most of the Company’s stores, which average approximately 2,900 square feet, feature couches and action sports-oriented video game stations.

The Company was founded in 1978 and is based in Everett, Washington.

Source: Reuters.com, SEC Filings.

Financial Summary

Total net sales for the third quarter ended October 31, 2009, increased 0.8% to $113.2 million from $112.2 million reported in the third quarter ended November 1, 2008. The Company posted net income for the quarter of $5.1 million or $0.17 per diluted share versus net income of $6.8 million or $0.23 per diluted share in the third quarter of the prior fiscal year. Comparable store sales decreased 8.0% for the third fiscal quarter of 2009 compared to a 5.8% decrease in the third quarter of 2008.

Total net sales for the first nine months ended October 31, 2009, decreased 2.8% to $275.2 million from $283.2 million reported in the first nine months of the prior year. The Company posted net income of $0.3 million or $0.01 per diluted share in the first nine months of fiscal 2009 compared to net income in the first nine months of the prior fiscal year of $10.9 million or $0.37 per diluted share. Results for the first nine months of fiscal 2009 include a charge of approximately $1.3 million, or $0.03 per diluted share, associated with the proposed settlement agreement of a previously disclosed lawsuit. Comparable store sales decreased 13.6% in the first nine months of fiscal 2009 compared with a decrease of 3.2% for the first nine months of 2008.

Source: Reuters.com, SEC Filings.

Analyst Consensus

This is the consensus forecast among 18 polled investment analysts. Against the Zumiez Inc. company.

The 12 analysts offering 12-month price targets for ZUMZ have a median target of 15.00, with a high estimate of 22.00 and a low estimate of 10.00. The median estimate represents a 34.89% increase from the last price of 11.12.

Source: www.ft.com

Source: http://www.reuters.com/finance/stocks/estimates?symbol=ZUMZ.O

Investment Highlights

ZUMZ earlier this month announced that total net sales for the four-week period ended October 31, 2009, decreased 1.5% to $24.7 million, compared to $25.0 million for the four-week period ended November 1, 2008. The Company’s comparable store sales decreased 8.9% for the four-week period, versus a comparable store sales decrease of 13.1% in the year ago period.

Shares of ZUMZ soared nearly 12% Friday afternoon despite the lower-than-expected third-quarter profit. The Company predicts fourth-quarter earnings between 18 cents and 22 cents, below analysts’ predictions of 25 cents a share.

Source: http://www.zumiez.com/

Technical Analysis

ZUMZ is below its 50-day moving average. This bearish sign is even more significant because the moving average is also trending lower.

ZUMZ is trading within its Bollinger Bands. This is a normal condition and suggests that the stock is neither overbought nor oversold relative to the recent price action.

The MACD for ZUMZ currently indicates a strong bearish signal for two reasons. First, the MACD is below the signal line, a 9-day moving average. Second, the MACD is below the critical level of 0, which implies that the underlying moving averages are trending lower.

Comparative Analysis

Source: Thomson Financial

Insider Trading Activity

Source: Yahoo Finance

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