Zumiez Profit Down, Issues Weak Q4 Outlook; Shares Down

(RTTNews) - Zumiez Inc. (ZUMZ) Thursday reported a drop in profit for the third quarter, as acquisition costs and a legal settlement charge erased a 6 percent growth in revenues. While quarterly earnings matched Wall Street estimates, sales missed expectations.

Looking forward to the fourth quarter, the sports apparel retailer issued a weak outlook, sending its shares down six percent in the extended trading hours.

Everett, Washington-based Zumiez' third quarter profit dropped to $11.9 million, or $0.39 per share, from $12.7 million, or $0.40 per share a year ago.

Results for the recent quarter included total charges of $0.07 per share related to the Blue Tomato acquisition and a lawsuit settlement.

Analysts polled by Thomson Reuters expected earnings of $0.46 per share. Analysts' estimates typically exclude special items.

Zumiez said sales for the third quarter grew 6.2 percent to $191 million from $180.0 million a year ago. Analysts estimated revenues of $190.7 million last year. Same-store sales, or sales from stores open at least a year, grew 1.5 percent.

Gross margin dropped to 37.0 percent from 37.3 percent last year, while operating margin decreased to 10.8 percent from 11.9 percent last year.

Looking forward to the fourth quarter, the company expects earnings of $0.60 to $0.66 per share, which includes about $0.05 per share in charges, and sales of $230 million to $237 million. Analysts currently earnings of $0.79 per share on revenue of $241.28 million for the quarter.

The company said it has approved the repurchase of up to $30 million of its common stock.

ZUMZ closed Thursday's trading at $26.24, down $1.05 or 3.85%, on the Nasdaq. The stock further dropped to $1.49 or 5.68% in after-hours trade.