What Happened?
Shares of clothing and footwear retailer Zumiez (NASDAQ: ZUMZ) jumped 7.9% in the morning session after the company reported strong third-quarter calendar 2025 results that surpassed expectations and provided an upbeat forecast for the upcoming quarter.
The specialty apparel retailer posted sales of $239.1 million, a 7.5% increase year-on-year that beat Wall Street's estimates. Same-store sales, a key metric for retailers, also rose by a robust 7.6%. Profitability showed significant improvement, with GAAP earnings per share of $0.55, which was well above analysts' consensus. The company's operating margin expanded to 4.9%, a notable increase from 1.1% in the same quarter last year. Looking ahead, Zumiez provided optimistic revenue guidance for the fourth quarter, projecting $293.5 million at the midpoint, which also exceeded analyst expectations.
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What Is The Market Telling Us
Zumiez’s shares are very volatile and have had 29 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 2 days ago when the stock gained 5.3% on the news that investor optimism grew ahead of its upcoming quarterly earnings report.
Investors looked forward to the announcement, which was scheduled for the following day. This positive sentiment was likely influenced by the company's performance in the previous quarter, when an earnings beat was followed by a 15.5% jump in the share price. Adding to the confidence, Zumiez had ended the previous fiscal year in a strong financial position, holding $147.6 million in cash and marketable securities with no debt. The company also expressed cautious optimism for fiscal 2025, anticipating sales growth and better product margins.
Zumiez is up 59.8% since the beginning of the year, and at $30.31 per share, has set a new 52-week high. Investors who bought $1,000 worth of Zumiez’s shares 5 years ago would now be looking at an investment worth $808.02.
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