Zumiez Inc. shares sunk in after-hours trading after the action-sports retailer’s guidance for the quarter fell short of analysts’ expectations.
The company’s shares were off about 11 percent in after-hours trading to a market value of $583.9 million.
Executives on a conference call late Thursday said comparable sales are likely to be softer in the first half of the year before rising in the back half as they await new trends to help lift sales.
“I know this is retail and trends, and pretty much everything, cycles in retail,” chief executive officer Rick Brooks said during the call.
He reiterated the company’s buyers have been experimenting with product in hopes of nabbing customer attention. “We’re not being cautious in this area,” Brooks said. “We’re really going out there to see if we can make it happen.”
The company said it expects a net loss of between $1.83 million and $2.88 million in the current quarter on revenue of $172 million to $175 million. The forecast is based on a comparable sales decline of 5 to 7 percent.
Analysts on average expected a loss of $262,000 in the current quarter on revenue of $177.8 million.
Zumiez, with 657 stores mostly in the U.S., appears to be in the midst of a fashion slump, not unlike others in the space, and believes it’s on the cusp of seeing new brands or styles cycle into its product mix after chief financial officer Chris Work pointed out sales from the company’s top 20 brands, as a percentage of companywide revenue, has declined over the past two years. It’s an indication, as Work and Brooks said during the call, of an eventual shift that will take place with the potential for smaller or emerging brands to increase sales.
The guidance also came with results for the January quarter, which came in better than consensus estimates.
Zumiez reported revenue of $242.4 million in the recently ended quarter, down 6.2 percent from a year earlier. Analysts expected revenue of $241.1 million.
Same-store sales were off 9.5 percent in the quarter, driven by declines in accessories, men’s, juniors and footwear. That compares with an 8.3 percent increase in the year-ago period.
Net income for the January quarter was off 24.9 percent to $13.1 million, in line with consensus estimates.