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Why Zumiez Inc. Stock Popped Today

What happened

Shares of Zumiez Inc. (NASDAQ: ZUMZ) were surging today after the streetwear retailer posted better-than-expected results in its second-quarter earnings report and gave strong guidance for the current quarter. As of 10:53 a.m. EDT, the stock was up 20.2%.

The company beat estimates on both top and bottom lines as revenue rose 7.8% to $192.2 million, edging out expectations at $192.1 million. Meanwhile, a loss of $0.03 a share a year ago narrowed to a loss of $0.02 a share, topping the analyst consensus of minus $0.06 a share.

So what 

Comparable sales were up 4.7% in the period, a sign that management is doing a better job at merchandising, managing inventory levels, and matching customer demand. After the quarter ended, comps were up 7.4% in August, another encouraging sign.

CEO Rick Brooks said, "Our business outperformed our expectations during the second quarter highlighted by a 4.7% comparable sales increase. Our intense focus on serving our consumer with differentiated assortments and great service is fueling market share gains and strengthening our leadership position in the industry."

Now what  

Zumiez's outlook for the third quarter was promising as well -- management sees revenue of $236 million-$241 million, earnings per share of $0.43-$0.48, and comparable sales of 4%-6%. That compares favorably to analyst expectations of $230.1 million and a per-share profit of $0.44.

The stock has been volatile in recent years, and results have been inconsistent as the company copes with broader changes in the industry. While today's news is encouraging, Zumiez still has an uphill battle to fight over the long term.

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