Zumiez Posts Blowout Q1 Results; Shares Pop

Zumiez, Inc. (ZUMZ) reported stronger-than-expected fiscal Q1 results, topping both earnings and revenue estimates. The beat reflects market share gains from increased discretionary spending in the U.S. driven by the government stimulus.

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Shares of the leading specialty retailer of apparel, footwear, equipment, and accessories gained 6.2% on Friday.

The company reported earnings of $1.03 per share, beating analysts’ expectations of $0.04 per share. The company reported a loss of $0.84 per share in the prior-year period.

Revenues of $279.1 million also exceeded the consensus estimate of $221.9 million. Notably, revenues jumped 102.6% on a year-over-year basis driven by a shift back to its historical channel mix and the return in customers’ confidence to shop in stores.

Zumiez refrained from proving guidance for the second quarter due to uncertainties concerning the COVID-19 situation and its inherent impact on revenues and costs. (See Zumiez stock analysis on TipRanks)

Management commented, “We are very pleased with our start to 2021 and are optimistic that we can maintain our positive momentum over the remainder of the year. With our strong balance sheet and differentiated strategies, we are well positioned to add to our global market share and return increased value to our shareholders over the long-term.”

Following the results announcement, B.Riley Financial analyst Jef f Van Sinderen increased the price target from $55 to $65 (37.4% upside potential) and reiterated a Buy rating on the stock.

Sinderen believes that Zumiez is well-positioned to gain market share reflected by its robust Q1 results despite the challenges related to the COVID-19 situation.

Overall, the stock has a Moderate Buy consensus rating based on 3 Buys and 3 Holds. The average analyst price target of $54.20 implies 14.6% upside potential from current levels. Shares of ZUMZ have jumped 56.7% over the past year.