Zumiez Inc. (NASDAQ:ZUMZ) Broke Out, May Head Higher

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Zumiez Inc. (NASDAQ:ZUMZ) shares logged in another green day closing at $22.47, up 0.9%, on volumes of 310 K.

So far, there appears to be little evidence of investors cashing in on the recent gains in the stock following its sales report for the five-week period ended October 1, which was notable for a 6.3% increase in comparable sales compared to a 1.8% decline in the corresponding previous year period.

Investors will recall that Zumiez shares popped as much as 16% on October 6 after the sales numbers came out. The gap open jump is yet to be closed.

Long-suffering investors would be relieved that Zumiez finally broke its 17 months’ streak of negative comps sales growth numbers.

Zumiez Inc. (NASDAQ:ZUMZ) raised guidance

Zumiez is a specialty retailer of apparel, footwear, accessories and hardgoods for young men and women, operating 682 stores, including 605 in the United States, 45 in Canada, and 27 in Europe and five in Australia.

The rise in sales volume prompted Zumiez to boost its guidance for the fiscal 2016 third-quarter. It now expects net sales in the range of $216 million-$217 million and net income per diluted share of about $0.29 to $0.30.

Previous guidance of the company was for net sales in the range of $209-$213 million and net income of about $0.21 to $0.26.

The company expects that comparable sales would increase roughly 2% during the third quarter.

The company’s new guidance stacks up well ahead of analysts’ expectations of EPS of $0.24 per share on revenue of $209.5 million.

How analysts view Zumiez Inc. (NASDAQ:ZUMZ)

Stifel has a Hold rating with an $18 price target.

Wedbush and Mizuho both have a Neutral rating with $18 and $19 price targets respectively.

William Blair analyst Sharon Zackfia upgraded Zumiez to an Outperform rating.

Technically, on the weekly chart, Zumiez has broken out of a symmetrical triangle pattern which also formed a base over the last 12 months. The stock has also managed to close above its March high of $22.14.

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