Zumiez Inc. beat analyst estimates for earnings in the second quarter, while turning in sales that were in line with expectations. The stock rose over 1 percent in after-hours trading to $16.78 on the news.
The skateboard and snowboard lifestyle retailer reported a net loss for the quarter of $800,000, or 3 cents a diluted share, down from $3.2 million, or 11 cents, a year ago. The FactSet estimate was for a loss of 8 cents a share in the quarter.
Total net sales for the three months ended July 30 decreased 0.9 percent to $178.3 million from $179.8 million a year earlier. The FactSet estimate had projected sales of $178 million.
“While our monthly comparable sales improved as the quarter progressed led by solid gains in our men’s category, our overall business continues to underperform versus our long-term expectations,” said chief executive officer Rick Brooks.
Zumiez also stated that it had acquired the outstanding stock of Fast Times Skateboarding company for $6.9 million on August 31. The deal was done with $5.5 million in cash and $1.4 million in shares of common stock. Fast Times is an Australian specialty retailer of skateboards and apparel. Brooks said, “Fast Times is an important component of the Zumiez global retail network and joins our existing operations in the United States, Canada, and Europe.“
Fast Times will continue to be headquartered in Melbourne, Australia, and will keep the Fast Times name. The company was founded in 2008 and operates five stores, plus a website. Brooks believes Zumiez can help Fast Times expand its operation.
Zumiez does seem like it is slowly turning itself around. The comparable sales decreased 1.1 percent for the four-week period ending August 27 compared to a comparable-sales decrease of 10.7 percent for the same period from last year.
Looking ahead, Zumiez introduced guidance for the third quarter with sales expected to be in the range of $209 to $213 million. This is higher than the FactSet estimate for sales of $206 million. Earnings are forecast to be in the range of 21 cents to 26 cents per diluted share. This is much lower than the FactSet estimate for earnings of 31 cents in the third quarter.