Several analysts said Friday they were concerned about Zumiez Inc.'s performance this upcoming holiday season, after the sports retailer posted a second-quarter loss and predicted a decline in same-store sales for the third quarter.
After Thursday's closing bell, Zumiez predicted that same-store sales × or sales at stores open at least one year × will decline in the mid-to-low teens.
Zumiez also posted a second-quarter loss because of charges to settle a lawsuit and a decline in same-store sales as the recession curbed discretionary spending.
Wedbush analyst Betty Chen, who rates the stock "Underperform," warned that Zumiez's business might struggle in the second half of this year because it doesn't run as many promotions as other teen retailers. Chen said this might hurt traffic in the back-to-school season and holiday season.
Baird analyst Mitch Kummetz said he was "nervous" about the fourth quarter, especially on demand for snow-related merchandise, which is typically higher priced.
"Zumiez isn't saying what comp it expects for the fourth quarter, but we believe that the company expects a negative comp," he said.
Kummetz rates the stock "Neutral." Overall, he said the company is positioned for long-term growth, especially as competition lessens, but that the company isn't best equipped to deliver value in the recession.
In premarket trading Friday, Zumiez shares gained 8 cents to $12.36.
Copyright 2009 AP News
Comments