Times are tough for companies related to board sports.
Companies that peddle board-sports-related fashions have had a hard time lately. It looks like investors didn't react too badly to Zumiez's
Zumiez's second-quarter net income decreased 12.9% to $2.7 million, or $0.09 per share. Total sales increased by 12.5% to $92.3 million, and same-store sales slid 1.7%, a far cry from the 11.6% increase in comps last year at this time.
Still, Zumiez's second-quarter numbers beat analysts' expectations. Perhaps that looks awfully good, considering shares of another company that provides action sports fashion, Pacific Sunwear
Perhaps that's why Volcom's
Abercrombie & Fitch
Zumiez now expects earnings of $0.80 to $0.82 per share for 2008, versus its old guidance for $0.90 to $0.93 per share. Zumiez may look somewhat reasonable, trading at 16 times trailing earnings (at least compared with its heady past, since MSN Money's data says its five-year high P/E was 90), but I think there are better opportunities elsewhere in retail stocks while consumer spending remains soft. (And personally, I've long preferred Volcom as a potential investment to Zumiez.)
While I'm not convinced that companies like Volcom and Zumiez are part of a fad that's losing momentum, I do suspect the short term may be fraught with wipeouts, given the slow consumer climate. I think anybody who's yearning for a shot at Zumiez stock has some time to look for better opportunities as the next couple months wear on.