Zumiez (ZUMZ) Shares Skyrocket, What You Need To Know

What Happened:

Shares of clothing and footwear retailer Zumiez (NASDAQ:ZUMZ) jumped 15.3% in the morning session after the company reported second-quarter earnings results. Zumiez blew past analysts' EPS expectations, and its revenue outperformed Wall Street's estimates. Although its earnings forecast for next quarter missed analysts' expectations, revenue guidance for next quarter exceeded expectations. Overall, this was a decent quarter (especially as many retailers struggled this quarter), with some key metrics above expectations.

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What is the market telling us:

Zumiez’s shares are somewhat volatile and over the last year have had 17 moves greater than 5%. But moves this big are very rare even for Zumiez and that is indicating to us that this news had a significant impact on the market’s perception of the business. 

The biggest move we wrote about over the last year was 6 months ago, when the stock dropped 11.2% on the news that the company reported fourth-quarter results that missed analysts' EPS expectations. The European division underperformed, and as a result, the company expects to slow its store growth in the region (it expects to open three new stores in Europe in 2024). Because of the weakness, Zumiez shared Q1 2024 revenue and EPS guidance that missed analysts' expectations. 

On the other hand, Zumiez exceeded analysts' revenue and gross margin expectations during the quarter, driven by a better-than-expected performance in its North American men's business. Overall, this was weaker quarter for Zumiez.

Zumiez is up 36.1% since the beginning of the year, and at $27.31 per share it is trading close to its 52-week high of $29.11 from August 2024. Investors who bought $1,000 worth of Zumiez’s shares 5 years ago would now be looking at an investment worth $889.34.

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