Please ensure Javascript is enabled for purposes of website accessibility

Why Zumiez, Inc. Stock Popped 23.6% in October

By Steve Symington – Nov 11, 2016 at 9:00AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

... and why it has continued to climb so far in November.

Image source: Zumiez, Inc.

What happened

Shares of Zumiez Inc. (ZUMZ 0.79%) rose 23.6% in the month of October, according to data provided by S&P Global Market Intelligence, after the specialty retailer revealed encouraging sales trends for September.

So what

More specifically on Oct. 5, Zumiez announced net sales for the five-week period ended Oct. 1 had climbed 11.5% year over year, to $75 million, including a 6.3% increase in comparable sales. As a result, Zumiez increased its guidance for the third quarter at the time, calling for revenue of $216 million to $217 million (up from its prior range of $209 million to $213 million) and net income per diluted share of $0.29 to $0.30 (up from previous guidance of $0.21 to $0.26)

Now what

What's more, Zumiez stock has climbed another 8% so far in November as of this writing, after the company last week announced an equally strong performance for October. For the four-week period ended Oct. 29, revenue climbed 14.4% year over year, to $55.9 million, including an accelerated 10.2% increase in comparable-store sales. As such, while Zumiez reiterated its revenue guidance for the quarter, it now expects net income per diluted share of $0.35 to $0.36.

To be fair, investors should receive more color on the underlying drivers of this strong performance when Zumiez formally releases its third-quarter results in early December. But in the meantime, as trends show improvement as we head into the crucial holiday season, it's no surprise to see investors so aggressively bidding up Zumiez stock right now.

Steve Symington has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.