ZUMZ Q3 2025 Guides Q4 Comps to 6–7.5%, Expects December Surge
- Holiday Sales Acceleration: Executives highlighted a robust Q4 guidance of 6%-7.5% comparable sales growth with strong December performance expected, underpinned by a near 9.9% comp increase during Black Friday and a 310 bps product margin improvement, indicating solid momentum into the holiday season.
- Category Rebound in Footwear: Despite temporary softness in footwear comps, management expressed confidence in a turnaround driven by a focus on full-price selling and post-Christmas demand recovery, suggesting that improved category performance can significantly boost margins.
- Operational Efficiency Through Store Optimization: The proactive strategy of closing underperforming stores—33 planned closures with most occurring in Q4—combined with occupancy leverage, underscores effective cost management aimed at driving profitability.
- Q4 Comps Uncertainty: The guidance of 6% to 7.5% comp growth contrasts sharply with the 2.9% quarter-to-date performance, highlighting a risk that the expected December pickup may not materialize, which could hurt overall fourth-quarter performance.
- Footwear Volatility: The footwear category, which shifted from a strong positive in Q3 to a negative result in Q4 to date, suggests persistent weakness. This volatility could continue to drag margins if full-price momentum fails to recapture lost ground.
- Hardgoods Challenges: Despite some positive signals in Australia, hardgoods remain the most negative comping category and have historically operated in long cycles. Continued softness here poses a risk to overall sales growth and profitability.
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Profitability Outlook
Q: How will US/Europe margins improve?
A: Management emphasized boosting product margins via full-price focus and tight cost controls to push both U.S. and European operations into profitability over time. -
Hardgoods Trend
Q: What is the outlook for hardgoods?
A: Despite ongoing pressure, management highlighted green shoots in Australia that signal a bottoming process and expect stabilization soon. -
Holiday Comp Acceleration
Q: Why are Q4 comps forecast higher?
A: They anticipate a December surge that will lift current 2.9% comps to a range of 6-7.5%, driven by seasonal sales acceleration. -
Footwear Performance
Q: Why did footwear comps drop in Q4 so far?
A: Management explained that initial softness due to discounting is expected to reverse as the season peaks and full-price sales rebound. -
Occupancy Impact
Q: How will store closures affect occupancy?
A: Upcoming closures are raising occupancy in those locations briefly, but overall efficiency improvements should deliver better leverage. -
Promotional Strategy
Q: What is the post-Black Friday promo approach?
A: The focus remains on consistent promotions with private label bundling and agile inventory management to drive value and maintain trend leadership.
Research analysts covering Zumiez.