Here's What Makes Zumiez (ZUMZ) A Promising Investment Bet

Zumiez Inc. (NASDAQ:ZUMZ) clearly appears to be a preferred pick, as it seems to have all it takes to catch investors’ attention. Notably, the company is benefiting from favorable comparable sales (comps) trend and a solid bottom-line picture, along with investments in logistics and omni-channel endeavors. Also, its focus on providing differentiated assortments bode well.

All these factors helped the company to deliver robust third-quarter fiscal 2019 results, wherein earnings surpassed the Zacks Consensus Estimate for the seventh straight quarter and revenues outpaced the consensus mark for the third consecutive quarter. The top line and the bottom line grew year over year. Moreover, management raised its fiscal 2019 view. (Read: Zumiez Up on Q3 Earnings & Sales Beat, Upbeat View)

In the past six months, shares of this Lynnwood, WA-based company have rallied 50.2% against the industry’s decline of 5.7%.



Further, analysts are steadily growing bullish on the stock. The Zacks Consensus Estimate for the fourth quarter and fiscal 2019 has moved north by 8.6% and 13% to $1.26 and $2.44, respectively, in the past 30 days.

All said, let’s take a closer look at the aspects driving this Zacks Rank #1 (Strong Buy) stock. You can see the complete list of today’s Zacks #1 Rank stocks here.

Factors Narrating Zumiez’s Growth Story

Zumiez has invested enough resources to boost localized merchandising assortments. The implementation of advanced technology has helped augmenting customers’ shopping experience across diverse channels. Further, it is boosting competitiveness by investments in logistics, planning and allocation along with omni-channel capabilities, which position it for growth in the long term.

Also, the company has been benefiting from favorable comps trend, which has been steadily rising since the trailing 13 quarters. During third-quarter fiscal 2019, comps grew 5.5%. The metric benefited from higher transaction volume and growth in dollars per transaction. Strength in the hard goods, accessories, footwear and men’s categories aided comps. However, the upside was somewhat offset by negative comps in the women’s categories. Management projects comps for the fiscal fourth quarter to grow 2-4%. For fiscal 2019, management now expects comps to rise 4-4.5% compared with prior view of 2-4% growth.

Further, the company is striving to expand its e-commerce and omni-channel platforms to provide consumers with the facility of quick and easy access to its products and brands. In this regard, Zumiez has considerably improved customers’ experience by integrating its physical and digital networks. This allows customers to access inventories through all channels alongside availing facilities like buy online, pick up in store, reserve online and pay in store. We believe that the company’s well-balanced store expansion and e-commerce strategies will help it keep track of the evolving patterns and drive top-line growth.

All said, we are optimistic that Zumiez’s growth plans will help keep its stellar show on.

3 More Stocks to Consider

Boot Barn Holdings, Inc. (NYSE:BOOT) delivered average positive earnings surprise of 22.7% in the trailing four quarters. It has a long-term earnings growth rate of 17% and a Zacks Rank #1.

Shoe Carnival (NYSE:CCL), Inc. (NASDAQ:SCVL) delivered average positive earnings surprise of 11.5% in the trailing four quarters. It currently sports a Zacks Rank #1.

Tilly's, Inc. (NYSE:TLYS) has a long-term earnings growth rate of 11% and a Zacks Rank #1.

5 Stocks Set to Double

Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

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