ANF Abercrombie and Fitch Co

HOT Topic Inc. (HOTT) reported positive same-store sales of 0.4% for the month of June, repeating the performance in its sequentially preceding quarter and way ahead of the 2.1% fall in the year-earlier period.

The company reported the third consecutive month of positive same-store sales after 23 months on the trot of negative comparables.  Prior to it, the company had last registered same-store sales growth of 3.1% way back in April 2009.

However, Hot Topic recorded a 1.8% year-over-year decline in total sales for the month, totaling $58 million.

June Sales Update

Hot Topic: Segment same-store sales inched down 1.5% in June 2011, improving nominally from a 1.6% drop in the prior-year period. Total sales of $43.2 million decreased 3.7% year over year for the month.

Torrid: Torrid registered same-store sales growth of 7% compared with a decline of 3.8% in the prior-year period. Sales improved 4.9% year over year to reach $14.8 million in the month.

Year-to-date Sales

Year to date, the company reported a same-store sales increase of 0.2%, reversing the fall of 7.3% in the prior-year period. Total sales for the period slipped 1.2% to $261.3 million.

Hot Topic: Year to date, same-store sales declined 1.3%. Though in the red, comparables improved considerably from a drop of 9.6% in the prior-year quarter. Sales for the period plunged 3.2% to $188.9 million.

Torrid: Torrid recorded same-store sales growth of 5.1% compared with 0.7% in the year-ago period. Sales improved 4.7% year over year to reach $72.4 million for the year-to-date period.

Guidance

The company estimates second-quarter 2011 loss per share between 9 cents and 11 cents, on the back of flat same store sales growth.

We maintain our long-term Neutral recommendation on Hot Topic Inc. The quantitative Zacks #3 Rank (short-term Hold rating) for the company also indicates no clear directional pressure on the stock in the near term.

Based in City of Industry, California, Hot Topic Inc. is a shopping mall-based specialty retailer operating the Hot Topic and Torrid store concepts across the U.S. as well as the e-space music discovery concept, ShockHound. The company competes with Abercrombie & Fitch Co. (ANF).

 
ABERCROMBIE (ANF): Free Stock Analysis Report
 
HOT TOPIC INC (HOTT): Free Stock Analysis Report
 
Zacks Investment Research