Zumiez (ZUMZ) PT, Estimates Cut at Piper Jaffray Post Q3
Piper Jaffray maintained a Neutral rating on Zumiez, Inc. (NASDAQ: ZUMZ), and cut the price target to $17.00 (from $21.00), following the company's 3Q earnings report. ZUMZ released FQ4 guidance in a range of $0.40 to $0.46, below Piper Jaffray's prior estimate of $0.68. The guidance reflects a comparable store sales decline of 14% to 16%. The company is employing key strategies to try to combat against this anemic sales trend by launching new brands, revisiting promotional strategies, accelerating a rollout of positively trending items across more stores, and adjusting spending in the near-term to protect profitability.
Analyst Neely Tamminga commented, "We are updating our model to reflect the company's FQ3 earnings report and outlook for FQ4 in which guidance is a range of $0.40 to $0.46, below our prior estimate of $0.68. November comparable store sales posted a 13.8% decline and FQ4 EPS guidance reflects a comparable store sales decline of 14% to 16%. We are lowering estimates beyond FQ4 and into next year. As such, our price target moves from $21 to $17. The company is employing key strategies to try to combat against this anemic sales trend by launching new brands, revisiting promotional strategies, accelerating a rollout of positively trending items across more stores, and adjusting spending in the near-term to protect profitability. That said, the magnitude of these sales declines give us pause despite the stock's inexpensive valuation; we remain Neutral on ZUMZ shares."
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Shares of Zumiez, Inc. closed at $13.90 yesterday.