Sep 6, 2009
Zumiez shares jump on narrower-than-expected comp sales decline
Sep 6, 2009
Sept 3 (Reuters) - Shares of Zumiez Inc (ZUMZ.O) soared as much as 22 percent on Thursday 3 September, a day after the company reported a narrower-than-expected decline in August sales at stores open at least a year, prompting a brokerage to upgrade the stock.
Robert W. Baird raised the stock to "outperform" from "neutral," and said the company may post better-than-expected third-quarter results.
"We now think the worst is behind the company, and we could potentially see some upside to expectations over the near term," analyst Mitch Kummetz said in a note to clients.
Kummetz said Zumiez will benefit as its competitor, Pacific Sunwear of California Inc (PSUN.O), was becoming less of a viable action sports retailer, evidenced by the company's exit from the skate shoe category.
"We believe that Zumiez is well positioned for long-term growth, as the company is still early in its development relative to other teen retailers," said the analyst, who raised his price target on the stock by 23 percent to $16.
On Wednesday 2 September, the mall-based retailer, which sells skate and snow-boarding inspired apparel and accessories, posted a 12.1 percent fall in same-store sales, while analysts were expecting a 18.9 percent decline.
Shares of Zumiez were trading up $2.08 at $14.31 Thursday (3 September) morning on Nasdaq. They had touched a high of $14.90 earlier in the session.
(Reporting by Mihir Dalal in Bangalore; Editing by Anne Pallivathuckal)
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