Hold on Tight as Zumiez Inc. Stock Gets Its Grove Back

Zumiez stock is a winner because of a strong investment in omnichannel systems

Zumiez Earnings

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Specialty retailer Zumiez Inc. (NASDAQ:ZUMZ) has been able to thrive, regardless of the industry headwinds. In fact, the stock has looked more like a fast-growing e-commerce operator lately. From the summer of last year, Zumiez stock has jumped from $12 to $26.

And for good reason, as seen with the latest report from Zumiez. For the five week period ended April 7, the total net sales rose by nearly 15% to $82.3 million. During this period, comparable sales increased by 12.6%, up from a meager 1.1% during the same time a year ago.

Yet this is no fluke. The fact is that momentum has been building, as seen with the robust holiday season. Keep in mind that there have been six consecutive quarters of positive comparable sales growth.

In light of all this, it should be no surprise that investors have been getting excited about Zumiez stock.

Zumiez Stock and the Reinvention of the Business

Richard Brooks has been CEO of Zumiez since 2000 and during his tenure, he has been able to build a sizeable retail business. The company currently operates nearly 700 stores, of which about 600 are in the U.S. The remaining locations are in Canada, Europe and Australia.

Brooks has certainly made major changes along the way.  For example, he has pulled off acquisitions that have helped to expand the market opportunity.  But of course, there have also been heftier investments in digital platforms and systems. And a key has been a focus on creating an omnichannel experience – that is, seamless integration across the ecommerce platform, POS and stores.

Note that customers can search for in-store products and then pick them up at a store; there is a loyalty program that spans all the channels; and the customer service is available across phone, email and social media like Twitter Inc (NYSE:TWTR) and Facebook, Inc. (NASDAQ:FB).

During the latest earnings call for Zumiez, CEO Rick Brooks had this to say about his strategy:

“[W]e believe in a channel-less consumer world where consumers do not see themselves as shopping online or in a physical store, but rather with a retailer that they trust, identify and engage with across multiple touchpoints.

To this end, we have made investments over the past several years in our technology platforms to create a seamless shopping experience for our customers…”

Interestingly enough, last year Total Retail named Zumiez as the No. 1 omnichannel retailer, among 100 others. The company had a perfect score based on seven criteria.

But the Zumiez strategy is more than just about pumping money into digital systems. The company has also continued to improve the merchandising and in-store experience. For example, last year Zumiez launched more than 150 new brands.

Bottom Line on Zumiez Stock

The challenges for the traditional retail industry are secular, as more consumers rely on ecommerce. So yes, we’ll likely see more bankruptcies and store closures.

But this does not mean that retail is doomed for extinction either, or that investors should stay away from Zumiez stock. Hey, after all, Amazon.com, Inc. (NASDAQ:AMZN) is one of the largest brick-and-mortar operators because of its acquisition of Whole Foods, right?

Definitely.

So the key is really how to build a seamless omnichannel platform, which is what consumers want. And for the most part, this is the advantage with ZUMZ stock. In other words, for investors looking for exposure to the retail space, these shares do look like a pretty good option.

Tom Taulli is the author of High-Profit IPO StrategiesAll About Commodities and All About Short SellingFollow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.


Article printed from InvestorPlace Media, https://investorplace.com/2018/04/zumiez-inc-zumz-stock-gets-its-grove-back/.

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