The stock of Zumiez (ZUMZ 20.25, +1.35, +7.1%) is up 7% in pre-market action, continuing a sharp rebound effort that revved up following the company's impressive second quarter earnings report in early September. In brief, the positive sales trends seen in the second quarter have persisted in the third quarter.
Zumiez caters to young men and women with fashion, footwear, and accessories that tie in to the fashion, music, art and culture of action sports, streetwear, and other unique lifestyles. That unique niche is helping it stand out in an apparel space that is crowded with sameness. Its sales performance suggests as much.
For the five-week period ended September 30, Zumiez saw its total net sales increase 12.6% year-over-year to $84.4 million. Its comparable sales, meanwhile, increased 9.3% on top of a 6.3% increase in the same period a year ago and a 7.4% increase in August.
Easy comparisons, then, were not part of the encouraging comparable sales performance in September. That's a good sign that its product assortment is connecting well with its finicky customer base and a hopeful sign ahead of the key holiday selling season.
Third quarter sales so far have been stronger than expected, so Zumiez has boosted its guidance for third quarter net sales to a range of $241 million to $243 million from $236 million to $241 million. In turn, Zumiez now expects comparable sales growth to be between 6% and 7% versus its prior guidance for comparable sales growth to be between 4% and 6%.
The positive sales trajectory has prompted Zumiez to raise the low end of its third quarter earnings guidance range. Specifically, Zumiez is forecasting net income per diluted share to be approximately $0.45 to $0.48 compared its prior guidance of $0.43 to $0.48.
Better than expected sales and increased earnings guidance is a combination that isn't heard regularly in the apparel industry these days, so the response to the company's update has been understandably positive. It is just the type of news that is needed to bolster investor confidence in the notion that a successful turnaround effort has taken root.
Entering today's trading, ZUMZ was down 13.5% for the year after a 65% spike off its August 21 low. Despite the recent surge, ZUMZ is still down nearly 60% from the high it saw in 2015.