Clothing and footwear retailer Zumiez (NASDAQ: ZUMZ) met Wall Street’s revenue expectations in Q1 CY2026, with sales up 4.9% year on year to $193.3 million. On the other hand, next quarter’s revenue guidance of $212.5 million was less impressive, coming in 3.1% below analysts’ estimates. Its GAAP loss of $0.82 per share was 1.7% below analysts’ consensus estimates.
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Zumiez (ZUMZ) Q1 CY2026 Highlights:
- Revenue: $193.3 million vs analyst estimates of $192.5 million (4.9% year-on-year growth, in line)
- EPS (GAAP): -$0.82 vs analyst expectations of -$0.81 (1.7% miss)
- Revenue Guidance for Q2 CY2026 is $212.5 million at the midpoint, below analyst estimates of $219.3 million
- EPS (GAAP) guidance for Q2 CY2026 is -$0.16 at the midpoint, missing analyst estimates by 266%
- Operating Margin: -7.9%, up from -10.8% in the same quarter last year
- Free Cash Flow was -$29.8 million compared to -$24.3 million in the same quarter last year
- Locations: 715 at quarter end, down from 730 in the same quarter last year
- Same-Store Sales rose 4% year on year (5.5% in the same quarter last year)
- Market Capitalization: $398.8 million
“We continue to make important progress towards sustained profitable growth,” said Rick Brooks, Chief Executive Officer of Zumiez Inc.
Company Overview
With store associates called “Zumiez Stash Members”, Zumiez (NASDAQ: ZUMZ) is a specialty retailer of street and skate apparel, footwear, and accessories.
Revenue Growth
Examining a company’s long-term performance can provide clues about its quality. Any business can put up a good quarter or two, but many enduring ones grow for years.
With $938.1 million in revenue over the past 12 months, Zumiez is a small retailer, which sometimes brings disadvantages compared to larger competitors benefiting from economies of scale and negotiating leverage with suppliers.
As you can see below, Zumiez struggled to increase demand as its $938.1 million of sales for the trailing 12 months was close to its revenue three years ago. This was mainly because it closed stores.
This quarter, Zumiez grew its revenue by 4.9% year on year, and its $193.3 million of revenue was in line with Wall Street’s estimates. Company management is currently guiding for flat sales next quarter.
Looking further ahead, sell-side analysts expect revenue to grow 1.4% over the next 12 months, similar to its three-year rate. This projection doesn’t excite us and suggests its newer products will not catalyze better top-line performance yet.
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Store Performance
Number of Stores
A retailer’s store count often determines how much revenue it can generate.
Zumiez listed 715 locations in the latest quarter and has generally closed its stores over the last two years, averaging 2.3% annual declines.
When a retailer shutters stores, it usually means that brick-and-mortar demand is less than supply, and it is responding by closing underperforming locations to improve profitability.
Same-Store Sales
The change in a company’s store base only tells one side of the story. The other is the performance of its existing locations and e-commerce sales, which informs management teams whether they should expand or downsize their physical footprints. Same-store sales gives us insight into this topic because it measures organic growth for a retailer’s e-commerce platform and brick-and-mortar shops that have existed for at least a year.
Zumiez has been one of the most successful retailers over the last two years thanks to skyrocketing demand within its existing locations. On average, the company has posted exceptional year-on-year same-store sales growth of 4.9%. Given its declining store base over the same period, this performance stems from a mixture of higher e-commerce sales and increased foot traffic at existing locations (closing stores can sometimes boost same-store sales).
In the latest quarter, Zumiez’s same-store sales rose 4% year on year. This performance was more or less in line with its historical levels.
Key Takeaways from Zumiez’s Q1 Results
We were impressed by how significantly Zumiez blew past analysts’ EBITDA expectations this quarter. We were also happy its gross margin narrowly outperformed Wall Street’s estimates. On the other hand, its EPS guidance for next quarter missed and its revenue guidance for next quarter fell short of Wall Street’s estimates. Overall, this quarter could have been better. The stock traded down 10.7% to $21.00 immediately following the results.
Zumiez may have had a tough quarter, but does that actually create an opportunity to invest right now? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).
