Stock Story -
What Happened?
Shares of clothing and footwear retailer Zumiez (NASDAQ:ZUMZ) fell 13.6% in the afternoon session after the company reported weak preliminary fourth quarter results, slashing its sales and earnings forecasts amid sluggish holiday demand. Net sales are now projected to fall between $275 million and $277 million, down from the earlier estimate of $284 million to $288 million. Earnings per share are expected to range from $0.72 to $0.77, below the previous guidance of $0.83 to $0.93. Management added, "After generally trending on plan through early December, we saw softer than expected results in the peak weeks of holiday." Overall, this was a challenging quarter. However, Zumiez wasn't the only one to report weak holiday demand, as Five Below (NASDAQ:FIVE) and Abercrombie & Fitch also didn't see the success that the market expected.The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Zumiez? Find out by reading the original article on StockStory, it’s free.
What The Market Is Telling Us
Zumiez’s shares are very volatile and have had 21 moves greater than 5% over the last year. But moves this big are rare even for Zumiez and indicate this news significantly impacted the market’s perception of the business.The biggest move we wrote about over the last year was 4 months ago when the stock gained 15.3% on the news that the company reported strong second-quarter earnings results. Zumiez blew past analysts' EPS expectations, and its revenue outperformed Wall Street's estimates. Although its earnings forecast for next quarter missed analysts' expectations, revenue guidance for next quarter exceeded expectations. Overall, this was a decent quarter (especially as many retailers struggled this quarter), with some key metrics above expectations.
Zumiez is down 13.9% since the beginning of the year, and at $16.34 per share, it is trading 43.9% below its 52-week high of $29.11 from August 2024. Investors who bought $1,000 worth of Zumiez’s shares 5 years ago would now be looking at an investment worth $494.44.