Zumiez jumps after lifting 3rd-quarter net income guidance above Wall Street’s viewBy AP
Tuesday, September 14, 2010
Zumiez climbs after raising 3Q net income outlook
NEW YORK — Zumiez Inc.’s stock surged more than 15 percent Tuesday after the sportswear company boosted its third-quarter earnings forecast above Wall Street’s expectations.
THE SPARK: On Monday, Zumiez, based in Everett Wash., raised its quarterly guidance to a range of 25 cents to 27 cents per share. Its prior outlook was for net income of 21 cents to 24 cents per share. Analysts polled by Thomson Reuters, whose estimates usually take out one-time items, predict 24 cents per share.
THE BIG PICTURE: Zumiez said it lifted its guidance because of strong sales trends and improved product margins. This is an encouraging sign that customers may be shaking off some of their economic concerns and are willing to spend a bit more now.
THE ANALYSIS: Edward Yruma of KeyBanc Capital Markets said in a client note that Zumiez sales continue to recover. He raised his third-quarter estimate to 27 cents from 24 cents per share and maintained a “Hold” rating.
SHARE ACTION: Zumiez jumped $2.67, or 15.3 percent, to $20.08 in afternoon trading. The stock has traded between $10.68 and $22.53 over the past year.
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