Zumiez Inc (NASDAQ: ZUMZ)

Sector: Consumer Cyclical Industry: Apparel Retail CIK: 0001318008
Market Cap 484.27 Mn
P/B 1.62
P/E 56.43
P/S 0.53
ROIC (Qtr) 1.78
Div Yield % 0.00
Rev 1y % (Qtr) 7.49
Total Debt (Qtr) 209.06 Mn
Debt/Equity (Qtr) 0.70

About

Zumiez Inc., often recognized by its ticker symbol ZUMZ, operates as a leading specialty retailer in the apparel industry. With a focus on youthful expression and individuality, the company's offerings span across fashion, music, art, and culture. Zumiez's global presence is felt through its operations under the names Zumiez, Blue Tomato, and Fast Times. The company's main business activities revolve around the retail of apparel, footwear, accessories, and hardgoods. These products cater to a wide audience, primarily consisting of teenagers and...

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Price action

Investment thesis

Bull case

  • Strong tangible asset base of 602.78M provides 2.88x coverage of total debt 209.06M, indicating robust asset backing and low credit risk.
  • Robust free cash flow of 37.97M exceeds capital expenditure of 12.53M by 3.03x, indicating strong organic growth funding capability.
  • Robust tangible asset base of 602.78M provides 4.24x coverage of working capital 142.24M, indicating strong operational backing.
  • Tangible assets of 602.78M provide robust 13.14x coverage of other current liabilities 45.88M, indicating strong asset backing.
  • Operating cash flow of 50.50M fully covers other non-current liabilities 7.09M by 7.12x, showing strong long-term stability.

Bear case

  • Operating earnings of 17.48M show weak coverage of depreciation charges of 85.40M, with a 0.20 ratio indicating high capital intensity and potential reinvestment needs.
  • High depreciation of 85.40M relative to operating cash flow of 50.50M, which is 1.69x suggests significant maintenance capital requirements affecting free cash flow.
  • Retained earnings of 104.40M provide limited buffer against comprehensive income items of (15.40M), which is -6.78x, indicating elevated exposure to market risks.
  • Operating cash flow of 50.50M is outpaced by equity issuance of (37.54M) (-1.35 ratio), indicating concerning reliance on equity markets for funding operations.
  • Short-term investments of 24.33M exceed receivables of 13.76M by 1.77x, indicating potentially inefficient capital allocation given collection cycle needs.

Peer comparison

Companies in the Apparel Retail
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 TJX Tjx Companies Inc /De/ 175.80 Bn 34.34 2.98 13.19 Bn
2 ROST Ross Stores, Inc. 58.85 Bn 28.21 2.67 5.19 Bn
3 LULU lululemon athletica inc. 25.43 Bn 14.61 2.30 1.76 Bn
4 BURL Burlington Stores, Inc. 18.26 Bn 32.57 1.63 5.94 Bn
5 GAP Gap Inc 10.00 Bn 11.75 0.65 5.52 Bn
6 URBN Urban Outfitters Inc 7.11 Bn 14.53 1.18 1.18 Bn
7 ANF Abercrombie & Fitch Co /De/ 6.17 Bn 11.82 1.19 1.13 Bn
8 BOOT Boot Barn Holdings, Inc. 5.78 Bn 27.75 2.79 0.67 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.97 1.35
EV to Cash from Ops. EV/CFO 12.16 8.18
EV to Debt EV to Debt 2.94 4.33
EV to EBIT EV/EBIT 35.13 -60.97
EV to EBITDA EV/EBITDA 6.30 6.53
EV to Free Cash Flow [EV/FCF] EV/FCF 16.18 22.99
EV to Market Cap EV to Market Cap 1.27 2.06
EV to Revenue EV/Rev 0.67 1.11
Price to Book Value [P/B] P/B 1.62 3.23
Price to Earnings [P/E] P/E 56.43 195.16
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 0.88
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 12.58
Dividend per Basic Share Div per Share (Qtr) 0.00 0.36
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 16.33
Interest Coverage Interest Coverage 0.00 13.58
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 11.48 -5.40
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 65.09 89.63
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 1.25
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 117.18 13.95
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 163.06 -16.93
EBIT Growth (1y) % EBIT 1y % (Qtr) 137.06 10.85
EBT Growth (1y) % EBT 1y % (Qtr) 137.06 6.10
EPS Growth (1y) % EPS 1y % (Qtr) 118.99 10.94
FCF Growth (1y) % FCF 1y % (Qtr) 462.81 -129.32
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 7.87 -1.75
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 1.45 1.40
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.06
Cash Ratio Cash Ratio (Qtr) 0.46 0.38
Current Ratio Curr Ratio (Qtr) 1.82 1.59
Debt to Equity Ratio Debt/Equity (Qtr) 0.70 1.31
Interest Cover Ratio Interest Cover Ratio 0.00 13.58
Times Interest Earned Times Interest Earned 0.00 13.58
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 11.20 2.72
EBIT Margin % EBIT Margin % (Qtr) 1.91 -1.70
EBT Margin % EBT Margin % (Qtr) 1.91 -2.76
Gross Margin % Gross Margin % (Qtr) 35.10 40.52
Net Profit Margin % Net Margin % (Qtr) 0.90 -4.02