ZUMZ's North America Segment Acts as Core Growth Catalyst: Here's Why

North America continues to serve as the core growth engine for Zumiez Inc. ZUMZ, delivering its strongest regional performance in the third quarter of fiscal 2025. Comparable sales in the region rose 10% year over year, marking the seventh consecutive quarter of positive comps, while North America net sales increased 8.6% year over year to $202.8 million. This performance meaningfully outpaced international markets and reinforced the region’s central role in driving consolidated growth.

This strength followed a successful back-to-school season and carried through the quarter, supported by merchandise assortments that resonated strongly with full-price customers. AUR-driven growth, higher dollars per transaction and broad-based category strength, led by women’s, hard goods, men’s and accessories, helped solidify the region’s strong position.

North America’s scale also translated into outsized profitability benefits. Product margin expansion, leverage on occupancy costs and lower shrink supported a meaningful increase in the gross margin. These gains, combined with disciplined expense management, drove a sharp year-over-year improvement in operating income, offsetting softer results in Europe and solidifying the region’s earnings leadership.

Momentum continued into the early fourth quarter. For the first 31 days of the fiscal fourth quarter, North America net sales rose 6.7% and comparable sales increased 7.8%, boosted by a strong Black Friday-Cyber Monday period. Management expects solid holiday demand but maintains a pragmatic view, anticipating some softening in non-peak traffic and a slight decline in comps from November’s reported level.

Management expects North America comparable sales growth of 4.5-6.5% for the fiscal fourth quarter, significantly outperforming international markets, which are projected to post low-single-digit declines. Despite softer non-peak traffic, North America is expected to drive the majority of fourth-quarter sales growth and remain the company’s core profit engine at the end of the fiscal year.

Zumiez’s Price Performance, Valuation & Estimates

ZUMZ shares have surged 94.3% in the past six months compared with the industry’s growth of 15.8%.

From a valuation standpoint, Zumiez trades at a forward price-to-sales ratio of 0.49X, down from the industry’s average of 1.95X. It has a Value Score of B.

The Zacks Consensus Estimate for Zumiez’s fiscal 2025 earnings implies a year-over-year surge of 911.1%, whereas the same for fiscal 2026 indicates an uptick of 48.9%. Estimates for fiscal 2025 and 2026 have been revised upward by 31 cents and 40 cents, respectively, in the past 30 days.

ZUMZ currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Other Key Picks

Some other top-ranked stocks in the retail space are FIGS Inc. FIGS, American Eagle Outfitters Inc. AEO and Boot Barn Holdings, Inc. BOOT. 

FIGS is a direct-to-consumer healthcare apparel and lifestyle brand. It flaunts a Zacks Rank #1 at present. 

The Zacks Consensus Estimate for FIGS’ current financial-year earnings and sales suggests growth of 450% and 7%, respectively, from the year-ago actuals. FIGS delivered a trailing four-quarter average earnings surprise of 87.5%.

American Eagle is a specialty retailer of casual apparel, accessories and footwear. It sports a Zacks Rank of 1 at present.

The Zacks Consensus Estimate for American Eagle's current fiscal-year earnings and sales suggests declines of 23.6% and growth of 2.4%, respectively, from the year-ago actuals. AEO delivered a trailing four-quarter average earnings surprise of 35.1%.

Boot Barn operates as a lifestyle retail chain devoted to western and work-related footwear, apparel and accessories. It currently has a Zacks Rank of 2 (Buy). 

The Zacks Consensus Estimate for Boot Barn’s fiscal 2026 earnings and sales implies growth of 20.5% and 16.2%, respectively, from the year-ago actuals. Boot Barn delivered a trailing four-quarter average earnings surprise of 5.4%.

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This article originally published on Zacks Investment Research (zacks.com).

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