Jefferies analyst, Randal J. Konik, cut his price target from $24 to $15 citing a lack of catalysts for Zumiez, Inc. (NASDAQ: ZUMZ) to turn its business around. Cost management can only go so far and until tough comps anniversary, the stock has little opportunity to break the trend.

Top-line trends have continued to decelerate. Following disappointing results over the last two quarters, comps dropped off further in November, leading management to guide 4Q well-below expectations.

ZUMZ is struggling from a perfect storm of issues, the most significant of which is the lack of a clear apparel trend that Zumiez can interpret into its core surf/skate DNA. On top of this, the company is facing (1) difficult comparisons up against a strong trend cycle last year, (2) weakness in Canadian border states/tourist locations from the strong US dollar, (3) weather headwinds, and (4) a more promotional stance from its competitive set, exacerbating traffic challenges.

ZUMZ has historically executed well through tough environments but at this point there is a lack of catalysts to turn the tide on the top-line. Further, while we believe the decision not to step up promotional levels is smart from a long-term perspective but it hinders their ability to drive a near-term topline recovery, in a competitive promotional environment in which their peers are discounting similar product. Comparisons ease in 2Q'17, which may provide some support, but the overarching lack of visibility here keeps us on the sidelines. Still, we believe LT growth drivers remain intact, including room for fleet growth (largely abroad) and omni-channel development.

The $15 PT is based on 13x F'17E EPS est and ~4.5x EV/EBITDA, a discount to the historical average given slowing trends.

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Shares of Zumiez, Inc. closed at $13.90 yesterday.