Zumiez (ZUMZ) Stock Looks Promising Going Into The New Year

In an era of the ever-evolving retail landscape, Zumiez Inc. (NASDAQ:ZUMZ) made multiple changes to its business model to adapt and stay relevant. Notably, this Washington-based company looks well poised for 2020, given its sound fundamentals and growth efforts. Factors such as steady wage gains, a solid labor market and improving consumer sentiments have been also favoring this specialty retailer of apparel, footwear and accessories.

This Zacks Rank #1 (Strong Buy) stock has soared 80.8% so far in the year against the industry’s decline of 16.2%. Additionally, the stock’s long-term earnings growth rate of 12% reflects its inherent strength. Moreover, the Zacks Consensus Estimate for fiscal 2020 top and bottom lines indicates a year-over-year improvement of 3.4% and 4.6%, respectively.

Strategic Endeavors

Zumiez has invested enough resources to boost localized merchandising assortments. The implementation of advanced technology has helped augment customers’ shopping experience across diverse channels. Further, it is boosting competitiveness by investing in logistics, planning and allocation along with omnichannel capabilities.

The positive impact of these endeavors is visible from the company’s comparable store sales (comps) performance. Zumiez has been witnessing a favorable comps trend. During third-quarter fiscal 2019, comps grew 5.5% on higher transaction volumes and growth in dollars per transaction. Management expects the positive comps trend to continue in fiscal 2019 and beyond.

Moreover, the company is striving to expand its e-commerce and omnichannel 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, and 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 the top line.

Clearly, the aforementioned positives substantiate the optimism in the stock’s 2020 performance.

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Target (NYSE:TGT) has a trailing four-quarter positive earnings surprise of 7.6%, on average. It sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

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Best Buy Co., Inc. (NYSE:BBY) , which carries a Zacks Rank #2, has a long-term earnings growth rate of 8.7%.

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