Zumiez Shares Surge on Strong Q3 Earnings and Bullish Holiday Outlook
The specialty retailer's comparable sales jumped 7.6%, defying broader sector concerns and signaling strong momentum heading into the critical fourth quarter.
Shares of Zumiez Inc. (NASDAQ: ZUMZ) jumped in trading Thursday after the specialty apparel retailer reported third-quarter financial results that significantly outpaced analyst expectations and provided a robust forecast for the crucial holiday shopping season.
The Lynnwood, Washington-based company announced a quarterly diluted earnings per share of $0.55, a nearly nine-fold increase from the $0.06 reported in the same period last year. The result sailed past the pre-earnings analyst consensus which hovered around $0.28 per share. Total revenue grew 7.5% year-over-year to $239.1 million, also beating market projections.
A key metric for the retailer, comparable sales, saw a significant 7.6% increase. This performance was driven by exceptional strength in its North American segment, where comparable sales climbed an impressive 10.0%. The strong top-line performance and disciplined expense management helped drive operating profit to $11.8 million, a sharp rise from just $2.4 million a year ago.
"We achieved our best third quarter in several years," said Rick Brooks, Chief Executive Officer of Zumiez, in the company's earnings announcement. Brooks credited the success to "enhancements to our brand and merchandise assortments that are resonating with our consumer," leading to strong full-price selling and expanded gross margins.
Zumiez's performance stands in stark contrast to a more cautious outlook for the wider retail industry. With many retailers facing hesitant consumers, S&P Global Ratings has maintained a negative outlook on the sector for the remainder of 2025, citing weaker consumer confidence and an uncertain macroeconomic environment. The company's ability to connect with its core youth demographic appears to be a significant competitive advantage.
Investors were further buoyed by the company's optimistic fourth-quarter guidance. Zumiez projects net sales to be between $291 million and $296 million, with diluted earnings per share in the range of $0.97 to $1.07. This forecast suggests management is confident that the current momentum will carry through the holiday period.
That confidence is supported by strong early-quarter results. For the 31-day period ending December 2, 2025, total sales were up 7.5%, with comparable sales increasing 6.6%. The critical Black Friday to Cyber Monday shopping window was particularly strong, with comparable sales up 8.7%.
The quarterly beat appears to have caught Wall Street off guard. Prior to the announcement, analyst ratings for ZUMZ were predominantly "Hold", with an average price target of $18.00. The stock had already closed Wednesday's session at $27.26, well above that consensus, and the strong report is likely to prompt a wave of revisions.
Adding to the positive narrative, Zumiez has been actively returning capital to shareholders, repurchasing 0.3 million shares in the third quarter for $5.4 million. The company's balance sheet remains solid, with cash and marketable securities rising to $104.5 million.