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($$$MR. MARKET$$$ is a proprietary investor and does not provide individual financial advice. The stocks mentioned on this forum do not represent individual buy or sell recommendations and should not be viewed as such. Individual investors should consider speaking with a professional investment adviser before making any investment decisions.)
When I was a kid, I was all fat. I used to eat Drakes Pies and watch Captain Boston on channel 56. About that time, they invented the skateboard, you know the kind with the little steel wheels?
I tried using it on Maple Terrace but Mrs. Leo yelled at me because I was making too much noise with the steel wheels. Then the Greek lady up the street told me to put my dog Spridle in the house because he sheeets in her yard. Then I got all hot. So at the end of the day, I didn’t see how skateboarding could possibly be more fun than eating Drakes Pies and watching Captain Boston.
Fast forward to today. The boards are fatter and the wheels are made of some kind of plastic and they are quiet friction free and roll a lot better. Without question, skateboarding is very popular. "Why is skateboarding so popular?" It's a good question - in a recent survey in the US, Skateboarding was found to be the 3rd most popular sport with teenagers, coming in just under football and basketball.
Skateboarding is popular all over the planet, with pro-level competitions raging year-round, all across the globe.
So the question pops up - why? Why is skateboarding so popular?
One reason is the simple anatomy of skateboarding. All you really need is yourself and a skateboard. Technically, you don't even need shoes! The skateboard itself is fairly low cost , especially if you don't need a "top of the line" skateboard. Plus, anyone can try skateboarding. It doesn't matter if you are fat or thin, short or tall, young or old - there's a board and a style that will work for you. Skateboarding is all about self expression.. Being yourself, learning the tricks and developing the style that is all you - that's easily one of the biggest reasons that skateboarding is popular.
Loud angry music, spikes, piercings, tattoos, and skateboarding - it all came together. Skateboarding is hard, and you have to be tough in order to learn. Skateboarding also has no rules. Anything goes. You can do what you want, be who you want, tell the world off. It's no wonder that skateboarding and punk go together well. It’s a lifestyle. It’s like a religion. So why not have a place to worship?
Today I bought stock in Zumiez, Inc. (ZUMZ) ay 37.10. I will sell it in 4 to 6 weeks at 42.79. Here’s why I like ZUMZ.
First of all, you have to like the spanking chart.
The stock price is going up because skateboarding is popular. The stock is up 44% in the last year, but the PE of this hot retailer is only 20. The company kicked butt in 2014, opening 56 new stores in fiscal 2014, including 7 stores in Canada and 6 stores in Europe.
Zumiez Inc. operates as a multi-channel specialty retailer of action sports related apparel, footwear, accessories, and hardgoods. The company’s stores focus on skateboarding, snowboarding, surfing, motocross, and bicycle motocross for young men and women. Its hardgoods include skateboards, snowboards, bindings, components, and other equipment. As of November 29, 2014, the company operated 604 stores, including 552 stores in the United States, 35 stores in Canada, and 17 stores in Europe under the Zumiez and Blue Tomato names; and zumiez.com and blue-tomato.com ecommerce Websites. The company was founded in 1978 and is headquartered in Lynnwood, Washington.
Why are these stores so good? Let’s ask the customers:
“Ask for Matt he's nice and sweet. This is a skate store in the Staten Island Mall. If your kid is a skater, and you want some gear for him/her they will be happy here. The staff is friendly. My pals got me a gift card because they carry Toms Shoes. Matt was really helpful with getting the right size and the most practical/versatile color. I felt 25 years too old to be shopping there, but he made me feel really comfortable and I had a very positive experience. Good customer service and speedy check out.”
“Excellent Customer Service with Care. The manager Jenny is fantastic and listens to customer needs. After leaving other shops in the mall, and being ignoredby department stores, I walked into this shop which carries everything, sneakers, tshirts, watches, and was warmly welcomed and serviced. The decor is dark and cozy. Shopping at Zumiez was great on my day off because their client service saved my time and energy. Thank you so much.”
“I like this store a lot... My older son loves the sneakers they sell here and the clothes.... The Supra shoes are cool and the tee shirts. The best part is the skate boards they assemble it fit in front of you so you know what you are buying.... Every time we go to a mall that is the first store my son looks for....”
“A lot of selection for a little store. What really shines here are the employees, they couldn't be more friendly or helpful. I think it helps to have the parent with the younger teen when shopping here.”
“This is a very great store. The staff are extremely nice and very friendly. They have a variety of brands such as Diamond Supply co, Obey, Crooks & castles, etc. I am planning to try to work them soon but overall very great store!”
“My preteen son loves this place, which is located at the far end of the Crossings Outlets, near Reebok. Lots of fun, trendy skater-themed clothing. What I like about this place is the service, which is consistently friendly and helpful. It is never difficult to find a salesperson, and they always ask if we would like help. Recently, when we were looking for a gift, the employee who helped us made invaluable suggestions. I also appreciate how my son, who spends much of his spending money in here, is treated just as well as an adult would be. They always engage him and speak to him as though he is a valued customer.”
“In a day and age when service at the "big" stores such as Macys, Lord&Taylor, etc has completely gone out the window, it's a pleasant surprise to find a chain store where service is clearly such a priority, and it is delivered consistently. I used to work in retail, and I have to say Zumiez really hits the mark when it comes to creating a great experience for their customers. Only deduction is for price - clothes are a bit pricey, but to be fair, I am guessing that is because they carry mostly trendy brands like Neff, Vans, etc. “
“Overall, a terrific place to shop for a preteen or a teen, or if you're at a loss for what to get among the big selection, a gift card would likely thrill as well.”
The company has seen seven positive estimate revisions in the past one month, while the ANAL-ysts Consensus Estimate moved higher over the same period, suggesting that more solid trading could be ahead for the company.
Remember, it’s all about the earnings…the earnings…the earnings…!
Earlier this month, ZUMZ reported some gnarly numbers dude.
Total net sales for the third quarter ended November 1, 2014 (13 weeks) increased 11.6% to $213.3 million from $191.1 million in the quarter ended November 2, 2013 (13 weeks). Comparable sales for the thirteen weeks ended November 1, 2014 increased 3.7% on top of a comparable sales increase of 1.5% for the thirteen weeks ended November 2, 2013. Net income in the third quarter of fiscal 2014 increased 32.6% to $15.7 million, or $0.54 per diluted share, compared to net income of $11.9 million, or $0.39 per diluted share, in the third quarter of the prior fiscal year.
Total net sales for the nine months (39 weeks) ended November 1, 2014 increased 11.2% to $553.0 million from $497.5 million reported for the nine months (39 weeks) ended November 2, 2013. Comparable sales increased 3.0% for the thirty nine weeks ended November 1, 2014 on top of a comparable sales increase of 0.7% for the thirty nine weeks ended November 2, 2013.
Net income in the first nine months of fiscal 2014 increased 34.5% to $25.7 million, or $0.88 per diluted share, compared to net income for the first nine months of the prior fiscal year of $19.1 million, or $0.63 per diluted share.
Rick Brooks, Chief Executive Officer of Zumiez Inc., stated, "We delivered double digit earnings growth in the third quarter driven by higher than expected sales along with lower than planned operating expenses. The merchandising, selling and marketing strategies we've implemented across our global platform are resonating with consumers and strengthening our brand position as a leading lifestyle retailer. We are optimistic about our growth prospects this holiday season and more importantly over the long-term."
“As discussed before, our ability to execute is highly dependent on the very passionate team of people here at Zumiez, to whom we entrust our brand everyday. Our commitment to investing in and further developing our great group of dedicated employees is as strong as ever. With the important holiday shopping season immediately in front of us, we are excited about the near term and optimistic about our team's ability to execute relative to the current retail landscape. But our sites are clearly set on the long-term. So as a management team we remain focused on those things that we believe will fortify and expand our brand, and our culture for years to come.”
“Our strength of our business as I've said a number of times now, it’s always about diversity, diversity of brands, diversity of categories in our business because we serve the entire lifestyle for this consumer.
So I don't want to get down to talk about individual cycles or trends, that's just not what we like to do. But to say that we always find ways and because of diversity our business, just like you would in diversity of your - to find the winners and then go after the winners and we are very good and we have a very strong set of bars, pursuing those things that are working and investing in inventory and taking advantage of the opportunities that are in front of us.”
Over the past five years Zumiez has grown its revenue by 100% and its net income by nearly 500%. Zumiez is going to have a ridiculous holiday season because mom and dad can now buy a skateboard because they aren’t spending money filling up their gas tank.
The company is really happy with how November turned out. The Black Friday holiday weekend was strong but they saw strength throughout . At the William Blair Growth Stock Conference, management noted that domestic store count has grown from 174 units in 2005 to 520 in 2014. The company is targeting a longer term store count of 600-700, representing significant upside for domestic expansion. Additionally, the company has ambitious plans for international expansion. While Zumiez has only 30 stores in Canada, they have suggested that there is an opportunity for 60-70 stores. Moreover, the company has only 14 stores throughout all of Europe, and it has no chains in Asia. Out in the Far East they always want to copy the US trends of whatever is so friggin cool.
The Company is introducing guidance for the three months ending January 31, 2015. Net sales are projected to be in the range $249 to $251 million resulting in net income per diluted share of approximately $0.69 to $0.72. ANAL-ysts project $1.66 per share this year and $1.87 per share next year on sales of $805MM and $880 MM respectively.
$$$MR. MARKET$$$ laughs at these numbers based on everything I just talked about. ZUMZ is going to bang out $810 MM of sales this year and then $950 MM next year. This would print earnings of $2.08 this year and $2.44 per share next year. At these earnings, and stable PE ratio, the stock price will vault past my target like some kooky cool dude on a skateboard.
Why is this going to happen? Because $$$MR. MARKET$$$ said so, that’s why.
Merry Christmas to all!
$$$MR. MARKET$$$
When I was a kid, I was all fat. I used to eat Drakes Pies and watch Captain Boston on channel 56. About that time, they invented the skateboard, you know the kind with the little steel wheels?
I tried using it on Maple Terrace but Mrs. Leo yelled at me because I was making too much noise with the steel wheels. Then the Greek lady up the street told me to put my dog Spridle in the house because he sheeets in her yard. Then I got all hot. So at the end of the day, I didn’t see how skateboarding could possibly be more fun than eating Drakes Pies and watching Captain Boston.
Fast forward to today. The boards are fatter and the wheels are made of some kind of plastic and they are quiet friction free and roll a lot better. Without question, skateboarding is very popular. "Why is skateboarding so popular?" It's a good question - in a recent survey in the US, Skateboarding was found to be the 3rd most popular sport with teenagers, coming in just under football and basketball.
Skateboarding is popular all over the planet, with pro-level competitions raging year-round, all across the globe.
So the question pops up - why? Why is skateboarding so popular?
One reason is the simple anatomy of skateboarding. All you really need is yourself and a skateboard. Technically, you don't even need shoes! The skateboard itself is fairly low cost , especially if you don't need a "top of the line" skateboard. Plus, anyone can try skateboarding. It doesn't matter if you are fat or thin, short or tall, young or old - there's a board and a style that will work for you. Skateboarding is all about self expression.. Being yourself, learning the tricks and developing the style that is all you - that's easily one of the biggest reasons that skateboarding is popular.
Loud angry music, spikes, piercings, tattoos, and skateboarding - it all came together. Skateboarding is hard, and you have to be tough in order to learn. Skateboarding also has no rules. Anything goes. You can do what you want, be who you want, tell the world off. It's no wonder that skateboarding and punk go together well. It’s a lifestyle. It’s like a religion. So why not have a place to worship?
Today I bought stock in Zumiez, Inc. (ZUMZ) ay 37.10. I will sell it in 4 to 6 weeks at 42.79. Here’s why I like ZUMZ.
First of all, you have to like the spanking chart.
The stock price is going up because skateboarding is popular. The stock is up 44% in the last year, but the PE of this hot retailer is only 20. The company kicked butt in 2014, opening 56 new stores in fiscal 2014, including 7 stores in Canada and 6 stores in Europe.
Zumiez Inc. operates as a multi-channel specialty retailer of action sports related apparel, footwear, accessories, and hardgoods. The company’s stores focus on skateboarding, snowboarding, surfing, motocross, and bicycle motocross for young men and women. Its hardgoods include skateboards, snowboards, bindings, components, and other equipment. As of November 29, 2014, the company operated 604 stores, including 552 stores in the United States, 35 stores in Canada, and 17 stores in Europe under the Zumiez and Blue Tomato names; and zumiez.com and blue-tomato.com ecommerce Websites. The company was founded in 1978 and is headquartered in Lynnwood, Washington.
Why are these stores so good? Let’s ask the customers:
“Ask for Matt he's nice and sweet. This is a skate store in the Staten Island Mall. If your kid is a skater, and you want some gear for him/her they will be happy here. The staff is friendly. My pals got me a gift card because they carry Toms Shoes. Matt was really helpful with getting the right size and the most practical/versatile color. I felt 25 years too old to be shopping there, but he made me feel really comfortable and I had a very positive experience. Good customer service and speedy check out.”
“Excellent Customer Service with Care. The manager Jenny is fantastic and listens to customer needs. After leaving other shops in the mall, and being ignoredby department stores, I walked into this shop which carries everything, sneakers, tshirts, watches, and was warmly welcomed and serviced. The decor is dark and cozy. Shopping at Zumiez was great on my day off because their client service saved my time and energy. Thank you so much.”
“I like this store a lot... My older son loves the sneakers they sell here and the clothes.... The Supra shoes are cool and the tee shirts. The best part is the skate boards they assemble it fit in front of you so you know what you are buying.... Every time we go to a mall that is the first store my son looks for....”
“A lot of selection for a little store. What really shines here are the employees, they couldn't be more friendly or helpful. I think it helps to have the parent with the younger teen when shopping here.”
“This is a very great store. The staff are extremely nice and very friendly. They have a variety of brands such as Diamond Supply co, Obey, Crooks & castles, etc. I am planning to try to work them soon but overall very great store!”
“My preteen son loves this place, which is located at the far end of the Crossings Outlets, near Reebok. Lots of fun, trendy skater-themed clothing. What I like about this place is the service, which is consistently friendly and helpful. It is never difficult to find a salesperson, and they always ask if we would like help. Recently, when we were looking for a gift, the employee who helped us made invaluable suggestions. I also appreciate how my son, who spends much of his spending money in here, is treated just as well as an adult would be. They always engage him and speak to him as though he is a valued customer.”
“In a day and age when service at the "big" stores such as Macys, Lord&Taylor, etc has completely gone out the window, it's a pleasant surprise to find a chain store where service is clearly such a priority, and it is delivered consistently. I used to work in retail, and I have to say Zumiez really hits the mark when it comes to creating a great experience for their customers. Only deduction is for price - clothes are a bit pricey, but to be fair, I am guessing that is because they carry mostly trendy brands like Neff, Vans, etc. “
“Overall, a terrific place to shop for a preteen or a teen, or if you're at a loss for what to get among the big selection, a gift card would likely thrill as well.”
The company has seen seven positive estimate revisions in the past one month, while the ANAL-ysts Consensus Estimate moved higher over the same period, suggesting that more solid trading could be ahead for the company.
Remember, it’s all about the earnings…the earnings…the earnings…!
Earlier this month, ZUMZ reported some gnarly numbers dude.
Total net sales for the third quarter ended November 1, 2014 (13 weeks) increased 11.6% to $213.3 million from $191.1 million in the quarter ended November 2, 2013 (13 weeks). Comparable sales for the thirteen weeks ended November 1, 2014 increased 3.7% on top of a comparable sales increase of 1.5% for the thirteen weeks ended November 2, 2013. Net income in the third quarter of fiscal 2014 increased 32.6% to $15.7 million, or $0.54 per diluted share, compared to net income of $11.9 million, or $0.39 per diluted share, in the third quarter of the prior fiscal year.
Total net sales for the nine months (39 weeks) ended November 1, 2014 increased 11.2% to $553.0 million from $497.5 million reported for the nine months (39 weeks) ended November 2, 2013. Comparable sales increased 3.0% for the thirty nine weeks ended November 1, 2014 on top of a comparable sales increase of 0.7% for the thirty nine weeks ended November 2, 2013.
Net income in the first nine months of fiscal 2014 increased 34.5% to $25.7 million, or $0.88 per diluted share, compared to net income for the first nine months of the prior fiscal year of $19.1 million, or $0.63 per diluted share.
Rick Brooks, Chief Executive Officer of Zumiez Inc., stated, "We delivered double digit earnings growth in the third quarter driven by higher than expected sales along with lower than planned operating expenses. The merchandising, selling and marketing strategies we've implemented across our global platform are resonating with consumers and strengthening our brand position as a leading lifestyle retailer. We are optimistic about our growth prospects this holiday season and more importantly over the long-term."
“As discussed before, our ability to execute is highly dependent on the very passionate team of people here at Zumiez, to whom we entrust our brand everyday. Our commitment to investing in and further developing our great group of dedicated employees is as strong as ever. With the important holiday shopping season immediately in front of us, we are excited about the near term and optimistic about our team's ability to execute relative to the current retail landscape. But our sites are clearly set on the long-term. So as a management team we remain focused on those things that we believe will fortify and expand our brand, and our culture for years to come.”
“Our strength of our business as I've said a number of times now, it’s always about diversity, diversity of brands, diversity of categories in our business because we serve the entire lifestyle for this consumer.
So I don't want to get down to talk about individual cycles or trends, that's just not what we like to do. But to say that we always find ways and because of diversity our business, just like you would in diversity of your - to find the winners and then go after the winners and we are very good and we have a very strong set of bars, pursuing those things that are working and investing in inventory and taking advantage of the opportunities that are in front of us.”
Over the past five years Zumiez has grown its revenue by 100% and its net income by nearly 500%. Zumiez is going to have a ridiculous holiday season because mom and dad can now buy a skateboard because they aren’t spending money filling up their gas tank.
The company is really happy with how November turned out. The Black Friday holiday weekend was strong but they saw strength throughout . At the William Blair Growth Stock Conference, management noted that domestic store count has grown from 174 units in 2005 to 520 in 2014. The company is targeting a longer term store count of 600-700, representing significant upside for domestic expansion. Additionally, the company has ambitious plans for international expansion. While Zumiez has only 30 stores in Canada, they have suggested that there is an opportunity for 60-70 stores. Moreover, the company has only 14 stores throughout all of Europe, and it has no chains in Asia. Out in the Far East they always want to copy the US trends of whatever is so friggin cool.
The Company is introducing guidance for the three months ending January 31, 2015. Net sales are projected to be in the range $249 to $251 million resulting in net income per diluted share of approximately $0.69 to $0.72. ANAL-ysts project $1.66 per share this year and $1.87 per share next year on sales of $805MM and $880 MM respectively.
$$$MR. MARKET$$$ laughs at these numbers based on everything I just talked about. ZUMZ is going to bang out $810 MM of sales this year and then $950 MM next year. This would print earnings of $2.08 this year and $2.44 per share next year. At these earnings, and stable PE ratio, the stock price will vault past my target like some kooky cool dude on a skateboard.
Why is this going to happen? Because $$$MR. MARKET$$$ said so, that’s why.
Merry Christmas to all!
$$$MR. MARKET$$$
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