By Dhirendra Tripathi
Investing.com – Zumiez (NASDAQ:ZUMZ) stock plunged 13% Friday after the company projected its current quarter sales to erode by more than a fifth from a year ago.
It also missed estimates for both sales and earnings in the fourth quarter ended January 29. The company is blaming last year’s stimulus that produced record annual sales for its lackluster forecast, saying sales will be “down meaningfully to the prior year.”
Net sales for the first quarter are seen between $215 million and $221 million, down by around 21% at the top end. At the pessimistic end, they could fall by as much as 23%, coming in after a record 2021.
Evidence of the sales weakening is already visible, according to the company. Total first quarter-to-date sales for the 35 days ended March 5 fell about 2%.
The company warned that fixed costs could come to hurt it as sales reduce. Expenses like store wages and travel expenses, all of which it was able to avoid during the pandemic, could return to weigh on earnings, it said.
Earnings per diluted share for the quarter are expected to be break-even to positive 10 cents per diluted share.
Zumiez said it will open around 34 new stores in the current financial year as it seeks to attract more young women and men to its apparel, footwear, and hard goods.
Sales in the fourth quarter were up a mere 4.6% to around $347 million. Quarterly profit on per share basis rose by 2 cents to $1.7.
The company closed the year with lower cash and current marketable securities, using the money for share repurchases and capital expenditures.