Furthermore, ZUMZ commented that the back-to-school selling season is starting earlier now, positively impacting its Q2 outlook. So, investors were primed for another strong quarterly performance when it issues Q2 results later in September.
Keeping that in mind, after the close last night, ZUMZ reported June comps of +2.7% which, on an absolute basis, is pretty solid. Total sales for the five-week period increased 6% year/year to $76.5 mln. Again, certainly nothing disastrous with that performance but, when stacked up against its outlook and recent performance, ZUMZ' June comps do come up a bit short of those aforementioned heightened expectations.
Specifically, as noted above, ZUMZ guided for Q2 comp growth of 3-5%. Rewinding back to its Q1 report, the company said it posted robust May comp growth of +7.5%. At the time, the thought was that perhaps ZUMZ was being conservative with its Q2 comp guidance, coming off of that very strong May figure. However, with June comps coming in below that 3-5% range, the possibility that ZUMZ will comfortably surpass its outlook took a major hit. That could be causing some disappointment among investors.
Furthermore, taking a look at its recent performance, the +2.7% figure is its second lowest of the year. Here is a closer look at the trend: January was +6.3%, February was +9.2%, March was +12.6%, April was +1.7%, and May was +7.5%. As the numbers show, ZUMZ got off to a hot start in 2018, but, two of the past three months now have shown much more modest growth.
To reiterate, though, ZUMZ is still posting positive comp growth and business isn't falling off of a cliff here. It could still have a very successful back-to-school season, swinging sentiment back in a positive direction. But, as is typically the case, it comes down to expectations, and for this month at least, ZUMZ came up a bit short.