In the world of mall-based apparel and accessories retailers, there are winners and there are losers. These days, it sounds increasingly as if there are mostly losers due to weak traffic and the impact of online competition.
Zumiez (ZUMZ 12.25), which sells apparel, footwear, and accessories for young men and women attracted to action sports, has been among the losers. Today, however, it stands a fighting chance of being a winner after the specialty retailer surprised investors with some relatively upbeat second quarter guidance on the heels of its monthly same-store sales update.
Specifically, Zumiez said its comparable sales in June increased 5.3%, versus a 4.5% decline a year ago and a 3.3% increase last month. That performance contributed to the company raising its quarterly sales guidance to $189 million to $191 million (prior was $185 million to $189 million) as well as its earnings expectations.
Due primarily to higher than planned sales results, Zumiez said it now expects a loss per share of ($0.08) to ($0.06) for the second quarter versus its prior guidance of ($0.11) to ($0.06).
The new guidance range is predicated mostly on an expectation for comparable sales growth to be between 3% and 4% for the quarter compared to prior guidance of 1% to 3% growth.
Many mall-based retailers will be facing easier comparisons in the quarters ahead, and to win back investor interest, they will need to demonstrate that they are at least hurdling the easy sales comparisons without giving up the shop so to speak through aggressive discounting that hits profit margins.
Zumiez still isn't expecting to turn a profit in the second quarter, yet it has turned out some positive-sounding news that is helping its stock, which desperately needs the help.
Shares of ZUMZ, which are down 43.9% year-to-date, are up 4.5% in pre-market action.