Why Zumiez, Inc. Stock Popped 23.6% in October

By Markets Fool.com

Image source: Zumiez, Inc.

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What happened

Shares of Zumiez Inc. (NASDAQ: ZUMZ)rose 23.6% in the month of October,according to data provided byS&P Global Market Intelligence, after the specialty retailer revealed encouraging sales trends for September.

So what

More specifically on Oct. 5, Zumiez announced net sales for the five-week period ended Oct. 1 had climbed 11.5% year over year, to $75 million, including a 6.3% increase in comparable sales. As a result, Zumiez increased its guidance for the third quarter at the time, calling for revenue of $216 million to $217 million (up from its prior range of $209 million to $213 million) and net income per diluted share of $0.29 to $0.30 (up from previous guidance of $0.21 to $0.26)

Now what

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What's more, Zumiez stock has climbedanother8% so far in November as of this writing, after the company last week announced an equally strong performance for October. For the four-week period ended Oct. 29, revenue climbed 14.4% year over year, to $55.9 million, including an accelerated 10.2% increase in comparable-store sales. As such, while Zumiez reiterated its revenue guidance for the quarter, it now expects net income per diluted share of $0.35 to $0.36.

To be fair, investors should receive more color on the underlying drivers of this strong performance when Zumiez formally releases its third-quarter results in early December. But in the meantime, as trends show improvement as we head into the crucial holiday season, it's no surprise to see investors so aggressively bidding up Zumiez stock right now.

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