Zumiez Q3 Profit Down, Yet Tops View, Guides Q4 Below Consensus

11/19/2009 6:29 PM ET

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(RTTNews) - Sport accessories retailer Zumiez, Inc. (ZUMZ: News ), Thursday reported a drop in profit for the third quarter, as higher expenses ate into a lackluster sales performance. Earnings for the period came in ahead of Street expectations, as did revenues.

The company's third quarter profit dropped to $5.1 million or $0.17 per share from $6.8 million or $0.23 per share last year. On average, eighteen analysts polled by Thomson Reuters anticipated the company to earn $0.15 per share for the three-month period. Analysts' estimates typically exclude one-time items.

Operating profit for the quarter was $8.36 million, down from $10.38 million registered in the comparable period last year.

Total net sales for the quarter rose just around 0.8% to $113.2 million from $112.2 million reported one year ago. Street analysts had estimated revenues of $112.14 million for the quarter.

Direct expenses for the quarter increased to $73.09 million from $72.98 million last year. S,G&A expenses were recorded at $31.74 million in the third quarter, compared to $28.88 million in the same period of 2008.

Everett, Washington-based Zumiez which operates stores primarily in malls, registered a 8% decrease in comparable store sales, compared to 5.8% reported in the prior-year. The company's retail strength included 378 stores as of October 21, 2009.

For the first nine months of 2009, the company posted a net income of $0.3 million or $0.01 per share, including a $0.03 per share loss on lawsuit settlement expenses. This compares with year-ago net income of of $10.9 million or $0.37 per share.

Net sales decreased 2.8% to $275.2 million from $283.2 million in the same nine-month period of 2008

Looking ahead to the next quarter, Zumiez said it expects to earn between $0.18 and $0.22 per share, based on a projected decline in comparable store sales in the high-to-mid single digit range. Analysts are currently looking at $0.25 per share earnings for the fourth quarter.

ZUMZ finished Thursday at $11.12, losing 5 cents or 0.45% on the Nasdaq. In after-hours trading, shares lost 1.98% or 22 cents, now at $10.90.