Skateboard Apparel Company Zumiez Isn’t Feeling Good About This

Zumies shares saw a huge drop on Friday, dropping more than 15% and hitting their lowest levels in more than five months.

What caused shares to take such a big tumble? The company issued a significantly weaker-than-expected forecast for Q1.

For the fiscal first quarter, the skateboard apparel retailer has projected a loss of 17 cents to 21 cents a share. This is well below the 3-cent loss per share expected by analysts polled by Thomson Reuters and investors weren’t digging it.

The company also estimates revenue to be between $178 million and $182 million.

Zumies actually had a pretty good fourth quarter earnings report, and even beat revenue. For Q4, the company posted adjusted earnings of 74 cents per share on revenue of $263.6 million, up 8.7 percent year-over-year. A consensus of analysts polled by Thomson Reuters estimated earnings of 66 cents per share on revenue of $260 million.

Despite those good results, the guidance forward had investors nervous. The stock was the worst performer in the SPDR S&P Retail ETF (XRT) on Friday.

“We are pleased with our finish to the year especially in light of the headwinds facing the retail industry,” Zumiez CEO Rick Brooks said in a press release on Thursday.

“Looking ahead, our primary focus remains on executing the strategic multi-year growth objectives… it is this focus that will allow us to successfully navigate through the current environment, including the impact that certain events are having on our monthly sales cadence in early 2017,” Brooks added.

Disclaimer: We have no position in Zumiez Inc. (NASDAQ: ZUMZ) and have not been compensated for this article.

Sofia Vida

Sofia has been writing for major news outlets for over 15 years. In her spare time she enjoys hiking, walking her dogs, and going to concerts.

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