Jefferies Trims PT on Zumiez (ZUMZ) to $20, Keeps Hold; Sees Tough H211 Comps Hampering Earnings

Jefferies trimmed its price target on Zumiez (Nasdaq: ZUMZ) from $21 to $20, while maintaining a Hold rating on the stock following second-quarter earnings results.

Jefferies notes that retail stocks move higher only when sales and earnings bias to the upside, and tough comps are making this a difiicult task for Zumiez. Also, Jefferies contends that this quarter didn't really matter, but it's the outlook that matters for Zumiez.

Zumiez reported seeing third-quarter earnings of 37 to 39 cents per share, lower than the 44 cent consensus. Jefferies comments, "further, for the first time in two years the company is likely to see GM% pressure, due to higher costs and the promotional retail environment."

Stronger second-half results last year will make Zumiez's effort to meet or beat those a tall order, according to Jefferies. "We remain particularly focused on the company's ability to lap difficult transaction compares," said Jefferies. "The good news is that so far we are seeing AUR gains help offset this."

Jefferies adjusted some fiscal 2012 EPS numbers: third-quarter lowered from 53 cents to 50 cents, with fiscal 2012 earnings dropped from $1.08 to $1.02.

Click here for more analyst color on Zumiez, or here for a ratings history.

Zumiez is 1 percent lower early Thursday.

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