Zumiez: A Model Of Consistency

| About: Zumiez Inc. (ZUMZ)

No matter how you slice it at Zumiez (NASDAQ:ZUMZ), the company’s profitability comparisons were materially more difficult to anniversary beginning in Q3 2011 (whether a 2-year, 3-year, or 4-year basis). But, in Q3 2011, the company delivered an impressive +85 Bps EBIT margin improvement versus LY.

We’re even more surprised by the fairly aggressive EPS guidance for Q4 2011… relative to the company’s historical practice of providing conservative EPS guidance.

What’s the secret sauce (besides the fairly differentiated product offering)? Again, ZUMZ did a great job controlling its inventory. Prior to Q2 2011, The Buckle (NYSE:BKE) and ZUMZ may have been the best at consistently controlling its inventory levels over the past 5 years in the specialty apparel sector. Today, now that BKE has tripped-up, ZUMZ stands alone.

(Click to enlarge)

Finally, check out the trailing 4-quarter EBIT margins (ex-items) for the following retailers. ZUMZ stacks up rather well in comparison (ZUMZ = 10.02%):

American Eagle (NYSE:AEO) 9.40% // Abercrombie (NYSE:ANF) 8.88% // Aeropostale (NYSE:ARO) 8.76% // BKE 21.98% // Gap (NYSE:GPS) 11.34% // Urban Outfitters (NASDAQ:URBN) 14.24%

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.