Zumiez Is Going Fakie, Again

Last week's pain is extending to this week, too -- Zumiez (Nasdaq: ZUMZ) just can't seem to get back on the board and stay there.

The news that precipitated a 13% drop (on my last check) in Zumiez's stock price today is that November same-store sales just weren't as good as Wall Street analysts had expected. Zumiez's comps increased 5.6%, compared with the heady 12.1% increase this time last year. Then again, analysts had expected an 8.1% comps increase for November. Meanwhile, Zumiez's net sales of gear for skateboarders and snowboarders zoomed 28.5% higher to $33.3 million.

That doesn't sound like such a terrible month to me, especially given the difficult comparison with last year, but anybody who tracks retail stocks knows that on that special Thursday every month when a glut of retailers report monthly comps, investors can get a little bit hysterical.

In fact, if some retailers have stopped reporting monthly comps altogether, this type of short-term emotion helped make the excuse to release less information; Starbucks (Nasdaq: SBUX) was guilty of this last year. In fact, last year at this time, I made retailers that were ratcheting down the frequency of their comps disclosures "Naughty" nominees for our Naughty and Nice in 2006 feature (although I couldn't deny that investors share some of the blame, given volatility on the monthly comps data).

Of course, when it comes to Zumiez, the negative sentiment was already in place when the retailer gave lethargic guidance in early November. Even though its quarterly results last week didn't raise any additional alarm bells -- in fact, the quarter was impressive in many ways -- investors still weren't won back over. Investors seem to be perceiving some rivals' November comps as more heartening, too. Abercrombie & Fitch (NYSE: ANF) (which runs the Hollister concept, which competes with Zumiez) beat expectations, and another rival, Pacific Sunwear (Nasdaq: PSUN), may have reported a slight miss, although its self-titled brand's comps increased 7.6%.  

So maybe it's not too surprising that missing expectations in November is an excuse for some investors to panic, and given this latest round, Zumiez's stock is down 38% in the last three months (peek at its chart to see how much damage has been done in the last couple weeks, too). However, given Zumiez's historical high growth rates and signs of resilience despite macroeconomic concerns (the company showed off resilience in October), it's arguable that its stock price is becoming more compelling with every wipeout.