Billabong ▼ -0.005 | PPR ▼ -0.60 | American Apparel ▼ -0.020 | The Buckle ▼ -1.28 | Columbia ▼ -0.80 | Deckers Outdoor ▼ -0.12 | Dicks ▼ -0.83 | Foot Locker ▼ -1.44 | Genesco ▼ -2.26 | Iconix Brand Group ▼ -0.94 | Jarden Corp ▼ -0.77 | Nordstrom ▼ -2.07 | Luxottica ▼ -0.97 | Nike ▼ -1.35 | Pacific Sunwear ▼ -0.01 | Skullcandy ▼ -0.32 | Sport Chalet - 0 | Urban Outfitters ▼ -1.13 | VF Corp ▼ -0.78 | Quiksilver ▲ +0.01 | Zumiez ▼ -1.99 | Macys ▼ -1.22 | Tillys ▼ -0.82 |
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Trailblazers in Women's Surfing Exhibit Opening at SHACC April 25th, 6-9 PM

By John Bernards, Director of Development, SHACC

 Opening Saturday, April 25 · 6-9 pm

SHACC takes a journey through time with innovators and trendsetters who challenged the status quo and left their mark in women's surfing.

This exhibit is made possible in part with support from

110 Calle Iglesia · San Clemente · 92672

ROTH - ZUMZ: Comp Exceeds Our Estimate On Continued International Gains

By Dave King, CFA, ROTH Capital Partners

March same-store sales exceeded our projection, but fell below consensus seemingly due to a weaker-than-expected benefit from the Easter shift to early April. Monthly sales were slightly depressed relative to the strong comp due to foreign currency pressures amidst continued significant outperformance in Europe. We continue to recommend Zumiez for its differentiated business model, consistent strategy, strong free cash flow, proven management, and underappreciated international growth opportunity.

Continued Comp Momentum In March.
Zumiez’ March same-store sales increased 5.5%—above our 4.5% estimate, but below the Street consensus of 6.4% consensus seemingly due to a weaker-than-expected benefit from the Easter shift to early April. This follows better-than-expected trends in each of the prior thirteen months, helped initially by strong market share gains and more recently due to an improving overall backdrop and significant outperformance internationally. Still, management noted positive monthly comps across all countries.
Positive Trends Across Most Categories.
March same-store sales grew due to higher average unit retail (AUR) and units per transaction, partially offset by a decrease in comparable transactions. Similar to recent months, men’s, hardgoods, juniors, and accessories all trended positive, while footwear trended negative.
Quarterly Revenue Tracking In-Line With Our Estimate.
Despite the strong comp, total net sales for the month increased 11.1% to $70.7 million—thereby weighing on calculated new store productivity due to the strong international gains and related currency pressures. Still, the company remains on pace to meet our 1Q15 revenue estimate of $177.3 million and guidance of $176.0-$178.0M, if not consensus of $179.8 million.
Maintain Buy Rating.
Adjusting for the March upside offset by a slightly weaker projected April comp, we left our FY15 EPS estimate unchanged at $1.85. We continue to recommend ZUMZ shares due to the company’s continued share gains, differentiated business model, consistent strategy, strong free cash flow, proven management, and underappreciated international growth opportunity. However, consensus estimates for the current quarter look somewhat aggressive and comparisons get more difficult beginning next month. We continue to favor more undervalued names that are at least maintaining market share amidst the generally improving backdrop.
We are lowering our price target from $45 to $42, which now assumes a roughly 20x multiple (down from 22x) on our FY15 EPS estimate of $1.85, plus ~$5.30 in net cash. This multiple is derived using a high-teens underlying growth rate and a 1.00x-1.25x PEG ratio.
Impediments to our price target could include increased competition, inaccurate predictions of consumer preferences and fashion trends, seasonally weak results, the departure of key members of management, and weak consumer spending.

The company faces competition from other mainly mall-based specialty retailers, such as American Eagle (AEO, NC), Abercrombie & Fitch (ANF, NC), Buckle (BKE, NC), Hollister, PacSun (PSUN, Neutral), etc., off-mall retailers like Tilly’s (TLYS, Buy), independent specialty shops, department stores, and direct marketers of similar products. We also get the sense Zumiez is not top of mind in several key markets for action sports. Management believes it can co-exist with nearer competitors like a Tilly’s, which has larger stores in more off-mall locations.

Although its scarcity model and micro-merchandising strategy help to offset the risk, much of the company’s potential for success hinges on its ability to accurately predict consumer preferences and fashion trends. We believe that the company's failure to anticipate, identify, and react in a timely matter to fashion trends, could negatively affect its business.
The company's operating results fluctuate quarterly with the third and fourth quarters typically generating stronger sales and when applicable, profitability. Therefore, the company is somewhat dependent on its second half performance and any unfavorable changes in weather and holiday shopping trends could negatively affect operating results.
We do not believe Zumiez’ success hinges on the abilities of any single executive, but given management’s strong experience and proven track record, the departure of several key members could negatively affect results.
Consumer spending remains fairly constrained due to a still somewhat difficult economic environment. Lackluster consumer confidence could limit discretionary purchases and negatively impact Zumiez’s sales.

ZUMZ is a mall-based specialty retailer of action sports related apparel, footwear, equipment and accessories operating under the Zumiez brand name and targeting young men and women between the ages of 12 and 24 who seek popular brands centered on activities such as skateboarding, surfing, snowboarding, BMX and motocross. Headquartered in Lynnwood, Washington, the company was founded in 1978 by founder and current chairman, Thomas Campion, and has grown since then to 604 stores as of November 29, 2014. In addition, the company operates a website at www.zumiez.com, which sells merchandise and provides content for the company's target customers.
Regulation Analyst Certification ("Reg AC"): The research analyst primarily responsible for the content of this report certifies the following under Reg AC: I hereby certify that all views expressed in this report accurately reflect my personal views about the subject company or companies and its or their securities. I also certify that no part of my compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.

ROTH makes a market in shares of Zumiez, Inc., Pacific Sunwear of California, Inc. and Tilly's, Inc. and as such, buys and sells from customers on a principal basis.

Shares of Pacific Sunwear of California, Inc. may be subject to the Securities and Exchange Commission's Penny Stock Rules, which may set forth sales practice requirements for certain low-priced securities.
For the full report in .pdf form, please click here.

Agenda Registration is Now Open!

By Mike Carter, Vice President, Sales and Marketing, AGENDA Trade Show

July 8-9, 2015 | 9am - 6pm
Long Beach Convention Center


Agenda Long Beach is our flagship show with the most diverse product offering. Categories include lifestyle, streetwear, contemporary, women's, accessories, action sports, outdoor, footwear, and both surf and skate hardgoods. If you are only able to attend one trade show this year, it should be Agenda Long Beach!

July 20-21, 2015 | 9am - 6pm
Javits Center - North Hall


Agenda:NYC takes place during New York Men's Market Week. This unique show is Agenda's authentic presentation of the gritty street culture, surf, skate and lifestyle, through the filtered lens of New York's polished men's fashion market.    

August 17-18, 2015 | 9am - 6pm
August 19, 2015 | 9am - 4pm
Sands Expo Center


Agenda is a permanent staple in Las Vegas Fashion Market Week serving as the streetwear, action sports and lifestyle-related extension to the Modern Assembly alliance. Given the timing and grand scale of Market Week, the shows tend to draw many key media, celebrities, and high-level fashion executives.


Agenda Las Vegas Winter Recap 2015 from Agenda Tradeshow on Vimeo.



Agenda New York City Winter 2015 Recap from Agenda Tradeshow on Vimeo.



Agenda Long Beach Winter 2015 Recap from Agenda Tradeshow on Vimeo.


Hotel & Travel
Take advantage of special Agenda rates for flights and hotels to all the Agenda shows.
Visit our travel page here for more info.


Five Signs It's Time to Upgrade

By Frank Kaufman, National Retail Practice Leader, Moss Adams

Over the past six weeks, we’ve presented a series of articles and resources with critical information and insight that will help you identify opportunities for growth and take advantage of them when they arise. In this final installment:

Growing companies are bound, sooner or later, to come up against the limits of their IT systems. When do the challenges of working with disparate, outdated software systems outweigh the cost of replacing them—and are they holding you back from growth? This video covers five signs it’s time for an upgrade.
Miss a piece in our series? Find more resources on growing your organization and managing growth-related challenges at www.mossadams.com/growth.

3 Best Practices for High-Performing B2B Sales Reps

By Owais Farooqui, Revenue Generator, NuORDER

B2B sales are powered by data and metrics, and putting that data at the center of your sales process means a 20% boost in your ROI. And yet, 42% of B2B sales reps don’t have adequate information before they make that call. 

Read our recent post to discover three best practices that help convert B2B prospects into customers.  You'll learn how to put data-driven decision-making processes in place, how to develop one-to-one B2B customer engagement, and how to provide access to a variety of assets that can be sent and viewed on mobile platforms to keep the conversation going.

Read more here.




Avila's El Ranchito "Cheers for Charity" Benefitting SHAAC on Saturday, April 4th

By John Bernards, Director of Development, SHACC

El Ranchito in Newport Beach is turning 40 and we are having a few friends over this Saturday, April 4th at 4:00 pm to drink Margaritas and support Surfing Heritage.

Please stop by and order the Avila's Margaritas!
It should be a fun get together.

Avila's El Ranchito
Cheers for Charity

April Charity: Surfing Heritage and Culture Center

Support Surfing Heritage and Culture Center and order our Avila's Margarita! $1 per margarita ordered will go to the foundation.

El Ranchito, Newport Beach
2800 Newport Blvd.

Latest Issue: Apparel, Accessories and Footwear Market Monitor

By Rich Anderson, Managing Director, Moss Adams Capital

Here are some highlights of the latest Apparel, Accessories and Footwear Market Monitor published by Moss Adams Capital:

• Middle Market M&A activity continues to thrive, growing 17% in 2014, while middle market Apparel, Accessories, and Footwear (“AAF”) transaction volume grew 29%

• Notable recent transactions include M1 Limited and L Capital Asia agreeing to acquire Pepe Jeans, Irving Place Capital’s takeover offer for American Apparel, and Youngone acquiring majority stake in
SCOTT Sports

• Diversified Large Cap and Performance AAF stocks kept pace with the S&P 500 growing 18% and 14% respectively, while Diversified Small Cap and Aspirational stocks declined

• Median sales and EBITDA of selected AAF companies are projected to grow 7% and 12% respectively, slightly higher than the S&P 500

Read more here.

Google's New Algorithm will Favor Mobile Sites

By Randy Taylor, Founder and CEO, Taylor Digital

Starting 4/21, Google's new algorithm will favor mobile sites!

To put it plainly: if your current site isn't suitable for mobile devices, then you will lose visibility no matter how well you are playing the SEO game.

Here are all the details you need to know be sure your site is optimized for mobile devices!



Thank you: We SAVED Trestles, Again!

By Katie Ferguson, Communications Manager, Surfrider Foundation

The Surfrider Foundation announced that the San Diego Regional Water Quality Control Board rebuffed the Foothill/Eastern Transportation Corridor Agency (TCA) in its attempts to secure a necessary water quality permit for its Tesoro Extension project. The Board voted unanimously 6 to 0 to adopt findings that reinforced its decision of June 2013, when the Regional Board rejected the requested Waste Discharge Requirements permit because the full project impacts of the entire road were not disclosed to it. The Save San Onofre Coalition applauds the Board’s decision.

The Tesoro Extension comprises the first five miles of TCA’s plan to connect the 241 toll road in Orange County to Interstate 5 in San Diego County. The project is part of TCA’s 16-mile toll road project that would bisect San Onofre State Beach, California’s fifth most popular state park, and protected natural lands in the Donna O’Neill Conservancy. If the full project is built, the state parks department has indicated it will abandon 60% of the state park because of the damage the toll road would cause.

The Board rejected TCA’s application for a Waste Discharge Requirements permit because TCA had failed to adequately disclose and mitigate the damage the project would cause to water quality and other natural resources. The vote today to adopt legal findings explaining why it rejected the toll road project represents the third time the Board has voted to stop the 241 extension project because of environmental concerns.

The TCA has spent more than $300 million in public funding for a project that has been repeatedly turned down. In fact, 78 percent of Orange County opposes building the proposed toll road through San Onofre State Beach, according to an August 2014 poll.

Following is a statement from Elizabeth Goldstein on behalf of the Save San Onofre Coalition:

“The Board today voted to protect our water quality, our parks and beaches from this destructive toll road project. We commend the Board for upholding California’s water quality laws and protecting the public interest,” commented Goldstein.

“The Board responded to the overwhelming evidence that the Tesoro Extension is no more than an attempt to commence construction of a larger, environmentally destructive that has been rejected by the Board and every other agency that has considered the project to-date.”

“This project needs to be rethought from the ground up, or abandoned, rather than twisted to accommodate every rejection the TCA experiences.”

Consumer Sector Takeaways From Our ROTH Conference

By Dave King, CFA, ROTH Capital Partners

The 27th Annual ROTH OC Conference included presentations and panels featuring more than 50 publicly-held and many private Consumer companies across the Active Lifestyle, Apparel, Brand Management, Consumer Electronics, Food & Beverage, Healthy Living, Infant & Juvenile, and Restaurants subsectors. We came from this year’s 4-day event feeling incrementally more positive on select names, including Performance Sports Group, Skullcandy, and Escalade.

Brand Panel Highlights Our Growing Your Brand In 2015 panel featured the founders of American Apparel (APP, Buy), American Rag Cie, and Neff as well as the former President & CEO of Nasty Gal and Star Jones of The View fame. Panelists highlighted the importance of authenticity, consistency of brand, and philosophy of product, as well as emerging themes in “making it yourself”.

Branding & Performance Imperative In Active Lifestyle Industry companies like Performance Sports Group (PSG, Buy), Escalade (ESCA, Buy), and Gaiam (GAIA, Not Covered) seem well-positioned for continued growth given their leading brands and focus on product quality and performance. Meanwhile, strong participation growth in lacrosse, yoga, and outdoor activities should continue to provide support. PSG, in particular, looks poised for continued market share gains and we remain comfortable with near-term consensus estimates despite currency pressures.

Retailers Consolidating Number Of Electronics Accessories Vendors Skullcandy (SKUL, Buy) and ZAGG (ZAGG, Neutral) have recently benefitted from strong growth in iPhone 6, new doors both domestically and internationally, and retailers consolidating their number of preferred vendors. Skullcandy, in particular, looks positioned to benefit from new doors and shelf space at Walmart beginning in June. This, combined with continued growth in gaming, internationally, and in sell-through from new fixtures/listening stations, suggests that 2015 revenue and EPS guidance remains conservative.

M&A Multiples Moving Higher Given accommodative capital markets, we believe many consumer-focused companies are pursuing acquisitions in the absence of material end market growth. Jarden’s (JAH, Not Covered) Martin Franklin noted a frothy deal environment, but an increased number of attractive targets and still reasonable multiples. Escalade and Crown Crafts (CRWS, Buy) noted similar trends as well as increased activity.

Growing Interest In Brand Licensor Business Model Sequential Brands, (SQBG, Buy), Cherokee (CHKE, Buy), and Xcel Brands (XELB, Buy) continue to make a strong push into brand licensing, with slight variations to the traditional Iconix (ICON, Buy) business model of focusing on brand management and marketing while licensing out manufacturing and distribution. This is pushing deal multiples higher and creating a need for larger acquisitions to move the needle. While this creates certain risks, we believe the model remains attractive, given high margins, limited working capital requirements, and annuity-like revenue streams. Cherokee shares should hold up best in an environment with investors somewhat questioning this business model due to management’s conservative nature and focus on organic growth, while Sequential looks positioned for the most long-term upside given its aggressive pursuit of accretive acquisitions and strong licensee relationships.

Increased I&J Spending Spending on Infant & Juvenile products is rising, helped by increased spending per child due to older and more affluent parents and with grandparents more involved in the upbringing process. Meanwhile, the U.S. birth rate likely bottomed in 2013 and should continue to increase with higher employment and household formation.These trends should benefit companies like Crown Crafts (CRWS, Buy) and Summer Infant (SUMR, Buy).

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