EVERETT — Riding a steep downslope is fun for skateboarders or snowboarders, but not for a company’s investors.
Shares of Zumiez Inc. ended Friday’s trading down more than $6.86 — or 27 percent — from the stock’s close a week ago. Most of the decline and the heaviest selling of the stock has occurred since Wednesday, the first day of trading in 2008.
That also was the day analyst Roxanne Meyer of CIBC World Markets wrote that Zumiez’s markdowns on clothing and snowboard packages are heavier than last year, a bad sign for the retailer.
Sara Hasan, an analyst who tracks Zumiez at McAdams Wright Ragen in Seattle, said she also has noticed more discounting at Zumiez locations. “It’s usually a bad sign. For some stores, discounting and promotions are part of their overall sales strategy, but not for Zumiez,” she said.
She noted that Zumiez isn’t the only retailer being drubbed by investors worried about holiday sales results and how a slowing economy in 2008 may affect stores. Since Monday, retail stocks are among those leading the decline on Wall Street.
On Friday, for example, Bed Bath &Beyond dropped $1.21 to $26.19 after reporting worse-than-expected profits and reducing its outlook for 2008. Talbots also fell noticeably and announced plans to retreat from children’s and men’s clothing sales, close 78 stores and eliminate hundreds of jobs.
“There’s a lot of worry out there about consumers, pricing and how $4-a-gallon gas this year will affect sales,” Hasan said.
With this week’s declines, Zumiez’s stock price is now at its lowest level since 2005, the year the action sports-oriented chain of 285 stores went public. Until recent months, the company’s stock was one of the fastest-gaining on the U.S. stock markets, thanks to quarter after quarter of impressive sales figures.
But the company’s stock price lost ground during 2007, and recent quarterly reports have made investors nervous.
“Zumiez has been a near-perfect story all this time, so you lose a lot of momentum investors when things change,” Hasan said.
Zumiez executives don’t routinely comment to the media about the company’s financial performance.
Zumiez isn’t the only Everett firm entering the new year with stock woes. Frontier Financial, the parent company of Frontier Bank, saw its shares lose 14 percent of their value this week. Intermec Inc., which is the most valuable public company based in Snohomish County, saw its stock price decline nearly 13 percent. Both of those companies are now trading at 52-week lows.
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