Zumiez Shares Tumble Following Q2 Results, Weak Forecast

Shares of

dropped more than 22 percent in after-hours trading after the company reported results for the second quarter and issued a weak outlook for the current quarter. The Lynnwood, Washington-based company posted quarterly net income of $3.2 million, or $0.11 per share, down from $7.5 million, or $0.26 per share, in the year-ago quarter. The fiscal 2015 results included $0.01 per share in charges associated with the acquisition of Blue Tomato. Its total net sales rose 1.8 percent to $179.8 million from $176.7 million. However, analysts were expecting earnings of $0.12 per share on revenue of $181.01 million. The average estimate among 5 Estimize users was for earnings of $0.13 per share and revenue of $180.95 million. Its comparable sales shrank 4.5 percent in the latest quarter, versus a 3.4 percent growth in the year-ago quarter. At August 1, 2015, Zumiez had $80.8 million in cash and current marketable securities, versus $113.4 million at August 2, 2014. Total net sales for the four-week period ended August 29, 2015 slipped 7.2 percent to $87.3 million, from $94.0 million in the year-ago quarter. Rick Brooks, Chief Executive Officer of Zumiez Inc., said, "We remain confident that our strategic course continues to provide us with compelling opportunities to grow our business and return greater value to our shareholders over the long-term. That said we are disappointed in our recent performance which reflects a slowdown in domestic sales. The response to our merchandise offering fell short of expectations, requiring us to become more promotional than planned to clear slow moving inventory ahead of the back-to-school selling season." For the third quarter, the company expects earnings of $0.27 to $0.31 per share, on revenue of $202 to $206 million. Analysts projected earnings of $0.53 per share on revenue of $224.7 million. Zumiez shares fell 22.07 percent to $16.88 in the after-hours trading session.