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Zumiez: A Reasonable Valuation, But Tough Comps Ahead

Jan. 02, 2022 2:41 AM ETZumiez Inc. (ZUMZ)2 Comments
Taylor Dart profile picture
Taylor Dart


  • Zumiez released its Q3 results in December, reporting revenue of $289.5 million, a 7% increase year-over-year and a 10% increase on a two-year basis.
  • The strong results were driven by more stores being opened and a more normal back-to-school season, and margins benefited from occupancy leverage and higher profit margins.
  • However, with Zumiez lapping government stimulus, a surge in demand from last year's re-opening, and an elevated proportion of full-priced selling in retail, it has tough comps ahead in Q1.
  • While I believe some of these risks are priced into the stock at ~11x FY2022 earnings estimates, I don't see enough of a margin of safety to buy the stock here above $48.30.

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It was an outstanding year in 2021 for the Retail Sector (XRT), with the index up 40% for the year, easily outperforming the S&P-500. Two of the stronger performers in the small-cap space were Zumiez (

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Taylor Dart profile picture
"A bull market is when you check your stocks every day to see how much they went up. A bear market is when you don't bother to look anymore."- John Hammerslough - Disclosure: I am not a financial advisor. All articles are my opinion - they are not suggestions to buy or sell any securities. Perform your own due diligence and consult a financial professional before trading or investing.

Analyst’s Disclosure: I/we have a beneficial long position in the shares of GLD either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Disclaimer: Taylor Dart is not a Registered Investment Advisor or Financial Planner. This writing is for informational purposes only. It does not constitute an offer to sell, a solicitation to buy, or a recommendation regarding any securities transaction. The information contained in this writing should not be construed as financial or investment advice on any subject matter. Taylor Dart expressly disclaims all liability in respect to actions taken based on any or all of the information on this writing.

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