Wedbush Downgrades Zumiez, Inc. (ZUMZ) to Underperform; Anticipation of Decelerating Comp Trends

January 6, 2011 8:17 AM EST Send to a Friend
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Price: $36.31 +0.36%

Rating Summary:
    10 Buy, 12 Hold, 0 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 7 | Down: 12 | New: 23
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Wedbush downgraded Zumiez, Inc. (NASDAQ: ZUMZ) from Neutral to Underperform. PT cut from $30 to $20.

Wedbush analyst says, "We are downgrading shares of ZUMZ as we believe decelerating December sales trends (from November and on a 2-year basis) is an omen for 2011 as the company begins lapping tougher compares of a +HSD to +LDD range versus –DD in 2010. Moreover, despite a track record of carefully managing SG&A, we believe management’s plans to reinvigorate square footage growth to a 8-10% range vs. 5% in 2010 means higher preopening expenses and store-line costs and implies current consensus estimates are too optimistic (requires +3-5% comps for leverage)."

"we are reducing our F11 EPS estimate to $0.93 from $0.98 prior or ~10% below consensus outlook of $1.03 as we anticipate tough comparisons and higher openings to pressure EPS."

For more ratings news on Zumiez, Inc. click here and for the rating history of Zumiez, Inc. click here.

Shares of Zumiez, Inc. closed at $26.67 yesterday.


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