What happened
Shares of sportswear retailer Zumiez (ZUMZ 1.77%) are ending the week on a high note, rising 13% through 11:05 a.m. EDT on Friday after the company reported three times the profit Wall Street analysts had forecast, along with a beat on revenue.
Heading into Zumiez's Q2 2020 report, analysts had forecast the company would earn $0.33 per share on sales of $234.2 million. Instead, Zumiez said it earned $1.01 per share on sales of $250.4 million.
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So what
Zumiez's sales increased 9.6% year over year, same-store sales grew 37.3% year over year, and profits were up 184.4%. Incredibly, it achieved these results despite the fact that stores were open for only 73.4% of the second quarter of 2020, versus 100% in the pre-pandemic Q2 2019.
Now what
CEO Rick Brooks confirmed that as of today, the majority of Zumiez's stores are open again. Even so, management says it continues "to lean heavily on our omni platforms to fulfill strong demand."
And that could be important, because not all of Zumiez's news is good. As Q3 began, it experienced a retail sales slowdown, with management warning that "total third quarter-to-date sales for the 37 days ending September 7, 2020, were down approximately 14%, compared with the same 37-day time period in the prior year ended September 9, 2019." This is despite e-commerce sales offsetting the sudden slowdown in brick-and-mortar sales by growing 27.4%.
Conclusion: Shareholders are smiling today, and they should enjoy the gains while they last. If this latest trend takes hold, Zumiez's sales revival could be fleeting.
