North America Drives Zumiez's Earnings Rebound: Strong Regional Momentum Signals Growth Ahead

Zumiez Inc. (ZUMZ) is experiencing a notable recovery, with North America emerging as the decisive growth lever for the retailer. In the third quarter of fiscal 2025, the region demonstrated exceptional strength, logging comparable sales growth of 10% year-over-year—the seventh straight quarter of positive performance. Net sales in North America climbed 8.6% to $202.8 million, substantially exceeding the company’s international operations.

Regional Performance Fueling Profitability Gains

The North America segment’s success extends beyond top-line growth into the bottom line. A combination of factors—including average unit retail (AUR) expansion, elevated transaction values, and breadth across women’s, hard goods, men’s and accessories categories—drove merchandise momentum. On the margin front, product cost improvements, occupancy cost leverage and controlled shrink rates translated into meaningful gross margin expansion. These operational gains, paired with disciplined spending control, produced a sharp improvement in operating income on a year-over-year basis.

This regional strength proved particularly valuable given softer results elsewhere, allowing North America to solidify its role as the company’s primary profit engine heading into the critical holiday season.

Fourth Quarter Trajectory and Forward Guidance

Momentum has continued into the early fourth quarter. During the first 31 days of fiscal Q4, North America net sales rose 6.7% with comparable sales up 7.8%, boosted by a robust Black Friday-Cyber Monday performance. Management’s guidance for the full fourth quarter projects comparable sales growth of 4.5-6.5%, with expectations of solid holiday demand tempered by anticipated softness in non-peak traffic periods.

The region is positioned to deliver the bulk of fourth-quarter sales growth, reinforcing its status as the company’s core earnings driver through the fiscal year-end.

Stock Valuation and Consensus Outlook

ZUMZ shares have appreciated 94.3% over the past six months, considerably outpacing the retail industry’s 15.8% advance. From a valuation lens, the stock trades at a forward price-to-sales multiple of 0.49X against an industry average of 1.95X, suggesting potential upside relative to peers.

Zacks consensus estimates project fiscal 2025 earnings to surge 911.1% year-over-year, followed by a 48.9% increase for fiscal 2026. Estimate revisions have trended upward—31 cents higher for fiscal 2025 and 40 cents higher for fiscal 2026 over the past month—reflecting analyst confidence in the recovery trajectory.

The stock currently carries a Zacks Rank of #1 (Strong Buy), underscoring the analyst community’s constructive stance on the company’s near-term and intermediate prospects.