NEW YORK (TheStreet) -- Zumiez (ZUMZ) shares are up 6.4% to $29.80 on Thursday after the retailer raised its second quarter guidance.
The company raised its EPS forecast to between 19 cents and 21 cents from its previous 12 cent - 16 cent guidance.
The company's improved outlook rests on strong sales during the quarter which the company estimates will be between $174 and $176 million, up from its previous estimates of between $170 and $171 million.
Must read: Warren Buffett's 25 Favorite Stocks
TheStreet Ratings team rates ZUMIEZ INC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate ZUMIEZ INC (ZUMZ) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels, growth in earnings per share, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 1.4%. Since the same quarter one year prior, revenues slightly increased by 9.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- ZUMIEZ INC has improved earnings per share by 12.5% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, ZUMIEZ INC increased its bottom line by earning $1.52 versus $1.35 in the prior year. This year, the market expects an improvement in earnings ($1.59 versus $1.52).
- Net operating cash flow has significantly increased by 276.41% to $16.57 million when compared to the same quarter last year. In addition, ZUMIEZ INC has also vastly surpassed the industry average cash flow growth rate of -3.80%.
- 35.32% is the gross profit margin for ZUMIEZ INC which we consider to be strong. Regardless of ZUMZ's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 1.53% trails the industry average.
- You can view the full analysis from the report here: ZUMZ Ratings Report