Earnings Preview: Zumiez

Zumiez (ZUMZ) is expected to report Q2 earnings Thursday after the closing bell with a conference call scheduled for 5:00 pm ET.

Guidance

Analysts are looking for a profit of 7c on revenue of $92.64M. The consensus range is 5c to 8c for EPS, and revenue of $89.86M to $96M, according to First Call. In May, Zumiez forecast FY08 EPS 90c to 92c vs. First Call consensus of 90c, and later said July same-store sales were down 1.4% vs. consensus of down 0.7%.

Analyst Views

Commenting on the quarter, Zacks Research forecast a weak consumer into 2009 because macro headwinds -- housing, debt and food and energy prices -- will persist for some time, although the firm previously believed that teen apparel retailers like Zumiez would be able to work through these conditions because teens are not directly affected by falling house prices, tightening credit standards and higher energy prices. However, Zacks said recent sales trends would indicate otherwise and it appears that parents have cut back on the discretionary spending for their kids. As a result, Zacks expects Zumiez's sales and earnings growth to be tempered for the next few quarters.

Wedbush analyst Betty Chen remains concerned about the potential risks tied to FY09 guidance, limited longer-term margin opportunity due to the company's private label strategy and potential revision to long-term growth plans.

Next event: Zumiez will release its August sales on September 3.