Clothing and footwear retailer Zumiez (NASDAQ: ZUMZ) fell short of the market’s revenue expectations in Q2 CY2026, with sales falling 2.5% year on year to $209 million. Next quarter’s revenue guidance of $224 million underwhelmed, coming in 5.9% below analysts’ estimates. Its GAAP loss of $0.17 per share was 21.4% below analysts’ consensus estimates.
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Zumiez (ZUMZ) Q2 CY2026 Highlights:
- Revenue: $209 million vs analyst estimates of $212.1 million (2.5% year-on-year decline, 1.5% miss)
- EPS (GAAP): -$0.17 vs analyst expectations of -$0.14 (21.4% miss)
- Revenue Guidance for Q3 CY2026 is $224 million at the midpoint, below analyst estimates of $238 million
- EPS (GAAP) guidance for Q3 CY2026 is $0.05 at the midpoint, missing analyst estimates by 91.5%
- Operating Margin: -0.6%, in line with the same quarter last year
- Free Cash Flow was -$2.35 million, down from $9.49 million in the same quarter last year
- Locations: 714 at quarter end, down from 731 in the same quarter last year
- Same-Store Sales rose 2.1% year on year, in line with the same quarter last year
- Market Capitalization: $296.1 million
"Second quarter results came in below last year driven by weaker performance in the U.S., which was primarily driven by continued softness in footwear as well as lower traffic levels," said Rick Brooks, Chief Executive Officer of Zumiez Inc. "The decline in the U.S. business was partially offset by continued growth across our other regions, underscoring the strength and diversification of our global business. Our back-to-school trend was similar to our second quarter results with the U.S. being our toughest performing market after two years of low double digit comparable store sales growth for the same periods, partially offset by comparable sales gains internationally. As we look forward to the holiday season, we remain focused on refining our merchandise assortments and deepening our customer experience initiatives to improve the trajectory."
Company Overview
With store associates called “Zumiez Stash Members”, Zumiez (NASDAQ: ZUMZ) is a specialty retailer of street and skate apparel, footwear, and accessories.
Revenue Growth
Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years.
With $932.8 million in revenue over the past 12 months, Zumiez is a small retailer, which sometimes brings disadvantages compared to larger competitors benefiting from economies of scale and negotiating leverage with suppliers.
As you can see below, Zumiez grew its sales at a sluggish 1.4% compounded annual growth rate over the last three years as it closed stores.
This quarter, Zumiez missed Wall Street’s estimates and reported a rather uninspiring 2.5% year-on-year revenue decline, generating $209 million of revenue. Company management is currently guiding for a 6.3% year-on-year decline in sales next quarter.
Looking further ahead, sell-side analysts expect revenue to grow 1.7% over the next 12 months, similar to its three-year rate. This projection is underwhelming and indicates its newer products will not lead to better top-line performance yet.
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Store Performance
Number of Stores
A retailer’s store count influences how much it can sell and how quickly revenue can grow.
Zumiez operated 714 locations in the latest quarter. Over the last two years, the company has generally closed its stores, averaging 2.5% annual declines.
When a retailer shutters stores, it usually means that brick-and-mortar demand is less than supply, and it is responding by closing underperforming locations to improve profitability.
Same-Store Sales
The change in a company’s store base only tells one side of the story. The other is the performance of its existing locations and e-commerce sales, which informs management teams whether they should expand or downsize their physical footprints. Same-store sales provides a deeper understanding of this issue because it measures organic growth at brick-and-mortar shops for at least a year.
Zumiez has been one of the most successful retailers over the last two years thanks to skyrocketing demand within its existing locations. On average, the company has posted exceptional year-on-year same-store sales growth of 4.7%. Given its declining store base over the same period, this performance stems from a mixture of higher e-commerce sales and increased foot traffic at existing locations (closing stores can sometimes boost same-store sales).
In the latest quarter, Zumiez’s same-store sales rose 2.1% year on year. This was a meaningful deceleration from its historical levels. We’ll be watching closely to see if Zumiez can reaccelerate growth.
Key Takeaways from Zumiez’s Q2 Results
We struggled to find many positives in these results. Its revenue guidance for next quarter missed and its EPS guidance for next quarter fell short of Wall Street’s estimates. Overall, this was a weaker quarter. The stock traded down 14.1% to $14.32 immediately after reporting.
Zumiez’s earnings report left more to be desired. Let’s look forward to see if this quarter has created an opportunity to buy the stock. We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).
