Financial Analysis: Ascena Retail Group (ASNA) vs. Zumiez (ZUMZ)

Ascena Retail Group (NASDAQ: ASNA) and Zumiez (NASDAQ:ZUMZ) are both small-cap retail/wholesale companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, analyst recommendations, valuation, institutional ownership, earnings, profitability and risk.

Analyst Ratings

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This is a breakdown of current ratings and price targets for Ascena Retail Group and Zumiez, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ascena Retail Group 0 6 0 0 2.00
Zumiez 0 3 2 0 2.40

Ascena Retail Group presently has a consensus price target of $2.60, suggesting a potential upside of 14.54%. Zumiez has a consensus price target of $24.00, suggesting a potential downside of 0.41%. Given Ascena Retail Group’s higher possible upside, analysts clearly believe Ascena Retail Group is more favorable than Zumiez.

Earnings and Valuation

This table compares Ascena Retail Group and Zumiez’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Ascena Retail Group $6.65 billion 0.07 -$1.07 billion $0.22 10.32
Zumiez $927.40 million 0.66 $26.80 million $1.10 21.91

Zumiez has lower revenue, but higher earnings than Ascena Retail Group. Ascena Retail Group is trading at a lower price-to-earnings ratio than Zumiez, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Ascena Retail Group has a beta of 1.74, indicating that its stock price is 74% more volatile than the S&P 500. Comparatively, Zumiez has a beta of 1.1, indicating that its stock price is 10% more volatile than the S&P 500.

Insider and Institutional Ownership

91.6% of Ascena Retail Group shares are owned by institutional investors. Comparatively, 71.7% of Zumiez shares are owned by institutional investors. 8.0% of Ascena Retail Group shares are owned by company insiders. Comparatively, 27.5% of Zumiez shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Ascena Retail Group and Zumiez’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ascena Retail Group -16.52% 2.02% 0.43%
Zumiez 2.89% 8.38% 5.71%

Summary

Zumiez beats Ascena Retail Group on 9 of the 14 factors compared between the two stocks.

About Ascena Retail Group

Ascena Retail Group, Inc., through its subsidiaries, operates as a specialty retailer of apparel, shoes, and accessories for women and tween girls in the United States, Canada, and Puerto Rico. The company operates through six segments: ANN, Justice, Lane Bryant, maurices, dressbarn, and Catherines. It creates, designs, and develops a range of merchandise, including apparel, accessories, footwear, and intimates; lifestyle products comprising cosmetics and bedroom furnishings; and wear-to-work, sportswear, footwear, and social occasion apparel. The company also offers casual clothing, career wear, dressy apparel, and active wear, as well as special occasion and classic apparel. Its principal brands comprise Ann Taylor, LOFT, maurices, dressbarn, Lane Bryant, Catherines, and Justice brands. As of July 29, 2017, the company operated approximately 4,800 stores. It also offers its products through its Websites, including anntaylor.com, LOFT.com, louandgrey.com, shopjustice.com, lanebryant.com, maurices.com, dressbarn.com, and catherines.com. The company was formerly known as Dress Barn, Inc. and changed its name to Ascena Retail Group, Inc. in January 2011. Ascena Retail Group, Inc. was founded in 1962 and is based in Mahwah, New Jersey.

About Zumiez

Zumiez Inc., including its subsidiaries, is a specialty retailer of apparel, footwear, accessories and hardgoods for young men and women through the fashion, music, art and culture of action sports, streetwear and other lifestyles. The Company operates under the names Zumiez, Blue Tomato and Fast Times. Additionally, it operates e-commerce Websites at www.zumiez.com, www.blue-tomato.com and www.fasttimes.com.au. It offers various categories of shoes, such as skate shoes, casual shoes, high tops, sandals, slip ons, runners, boots and shoe accessories, such as socks. It also offers flannels, baseball tees, hoodies, baseball hats, windbreakers, shirts, jackets, jerseys, sweaters and tanks, among others. For women, it offers t-shirts, tank tops, hoodies and sweatshirts, cardigans, jackets, skirts, jeans, joggers, leggings and dresses, among others. It provides various accessories, including watches, sunglasses, bracelets, earrings, rings, beanies, hats, belts, wallets and phone accessories

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