Analyzing Zumiez (NASDAQ:ZUMZ) and Genesco (NYSE:GCO)

Genesco (NYSE:GCO) and Zumiez (NASDAQ:ZUMZ) are both small-cap retail/wholesale companies, but which is the superior business? We will contrast the two businesses based on the strength of their risk, earnings, analyst recommendations, valuation, profitability, dividends and institutional ownership.

Risk & Volatility

Genesco has a beta of 1.87, suggesting that its stock price is 87% more volatile than the S&P 500. Comparatively, Zumiez has a beta of 0.89, suggesting that its stock price is 11% less volatile than the S&P 500.

Institutional and Insider Ownership

94.5% of Genesco shares are held by institutional investors. Comparatively, 95.5% of Zumiez shares are held by institutional investors. 23.1% of Genesco shares are held by company insiders. Comparatively, 21.2% of Zumiez shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares Genesco and Zumiez”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Genesco	$2.38 billion	0.13	-$18.89 million	($0.18)	-161.16
Zumiez	$889.20 million	0.47	-$1.71 million	$0.48	51.90

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

Profitability

This table compares Genesco and Zumiez’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Genesco	N/A	2.11%	0.78%
Zumiez	0.94%	2.33%	1.14%

Analyst Ratings

This is a summary of current ratings for Genesco and Zumiez, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Genesco	1	3	0	1	2.20
Zumiez	0	2	0	1	2.67

Genesco currently has a consensus price target of $36.00, suggesting a potential upside of 24.10%. Zumiez has a consensus price target of $18.00, suggesting a potential downside of 27.74%. Given Genesco’s higher possible upside, equities research analysts clearly believe Genesco is more favorable than Zumiez.

Summary

Zumiez beats Genesco on 9 of the 13 factors compared between the two stocks.

About Genesco

Genesco Inc. operates as a retailer and wholesaler of footwear, apparel, and accessories in the United States, Puerto Rico, Canada, the United Kingdom, and the Republic of Ireland. The company operates through four segments: Journeys Group, Schuh Group, Johnston & Murphy Group, and Genesco Brands. The Journeys Group segment offers footwear and accessories through the Journeys, Journeys Kidz, and Little Burgundy retail chains, as well as through e-commerce and catalogs for young men, women, and children. Its Schuh Group segment operates Schuh retail footwear stores that offer casual and athletic footwear, as well as sells footwear through e-commerce. The Johnston & Murphy Group segment involved in the retail and e-commerce operations; and wholesale distribution of men’s dress and casual footwear, apparel, and accessories, as well as women’s footwear and accessories. Its Genesco Brands Group segment markets footwear under the Levi’s, Dockers, and G.H. Bass brands for men, women, and children, as well as designs and manufactures the STARTER brands footwear. The company operates through Journeys, Journeys Kidz, Schuh, Little Burgundy, and Johnston & Murphy brand names; and e-commerce websites, including journeys.com, journeyskidz.com, journeys.ca, schuh.co.uk, schuh.ie, schuh.eu, johnstonmurphy.com, littleburgundyshoes.com, johnstonmurphy.ca, nashvilleshoewarehouse.com, and dockersshoes.com. Genesco Inc. was incorporated in 1934 and is headquartered in Nashville, Tennessee.

About Zumiez

Zumiez Inc. operates as a specialty retailer of apparel, footwear, accessories, and hardgoods for young men and women. The company provides hardgoods, including skateboards, snowboards, bindings, components, and other equipment. It operates stores in the United States, Canada, Europe, and Australia under the names of Zumiez, Blue Tomato, and Fast Times. It operates zumiez.com, zumiez.ca, blue-tomato.com, and fasttimes.com.au e-commerce websites. Zumiez Inc. was founded in 1978 and is headquartered in Lynnwood, Washington.