Jefferies Lowers Price Target on Zumiez, Inc. (ZUMZ), Weak Outlook

Jefferies is maintaining their Hold rating on shares of Zumiez, Inc. (NASDAQ: ZUMZ) following their strong quarter with one of the best toplines in retail, but is lowering their price target by $5 to $25 light of difficult sales and margin compares that the company will face in 2011.

The company reported their 4Q EPS of $0.49 which was $0.03 ahead of the firm, $0.01 ahead of the street, and $0.02 above their own guidance. They claim that the upside was due to strong sales trends and rising margins along with a positive ski season. Sames store sales grew 12% overall while operating margins expanded ~500bps.

ZUMZ released their 1Q11 guidance with a range of ($0.03)-$0.00. The company also commented that same store sales were expected to be lower than the last quarter. Jefferies believes that their guidance will end up being conservative as retail company's are scared to hike up expectations and then fall below them as it will cause serious repercussions to the stocks price.

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 $28.18 yesterday.

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