Shares of Zumiez surged 12.9% on Friday after the sportswear retailer reported 2Q earnings three times higher than the Street’s earnings forecast. The company, on September 10, posted 2Q EPS of $1.01, which surpassed Street estimates of $0.28 and jumped 181% from the year-ago quarter.
Zumiez’s (ZUMZ) 2Q revenues increased 9.6% to $250.4 million year-on-year and beat analysts’ expectations of $234.2 million. The sports apparel and equipment retailer’s CEO Rick Brooks said, “we successfully executed a quick and safe reopening of the majority of our stores in the quarter, while continuing to lean heavily on our omni platforms to fulfill strong demand for our distinct merchandise offering.”
Zumiez stated that stores were open for 73.4% of the second quarter. Comparable sales for stores open during the quarter soared 37.3% year-over-year. (See ZUMZ stock analysis on TipRanks).
However management did add that “total third quarter-to-date sales for the 37 days ending September 7, 2020, were down approximately 14%, compared with the same 37-day time period in the prior year ended September 9, 2019.”
Following the company’s overwhelming 2Q results, B. Riley FBR analyst Jeff Van Sinderen raised the price target to $35 (23.1% upside potential) from $33 and reiterated a Buy rating. In a note to investors, Sinderen on September 11 said that Zumiez is “poised to take market share.”
Currently, the Street has a cautiously optimistic outlook on the stock, with a Moderate Buy analyst consensus. With shares down nearly 17.7% year-to-date, the average analyst price target of $34.67 implies an upside potential of 21.9% from current levels.