ZUMZ - Zumiez Is An Interesting Business But A Hold Until Things Improve

2024-03-11 02:14:41 ET

Summary

• Zumiez is an apparel retailer focused on skater-style clothing and skate-hard goods.
• The company has quality aspects: a long-tenured, competent management team, customer focus, brand value, an engaging digital presence, a history of growth, and a strong balance sheet.
• The current context is challenging, with ZUMZ losing margins rapidly due to promotional competition and already presenting operational losses.
• The company can survive a few years of economic downturn thanks to its strong balance sheet and may even recover.
• The stock price already discounts these developments, therefore not representing an opportunity.

Zumiez ( ZUMZ ) is an apparel retailer focused on skater-style clothing and skate-hard goods. The company's operations are mostly US-based, but it has sibling store concepts and brands in Europe (Germany, Austria) and Australia.

I believe the company has quality aspects: a long-tenured, competent management team, customer focus, brand value, an engaging digital presence, a history of growth, and a strong balance sheet....

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