Hot Topic Gets Positive Comps - Analyst Blog
August 05 2011 - 1:02PM
Zacks
HOT Topic Inc. (HOTT) reported positive
same-store sales of 7.3% for the month of July, striding ahead of
the 0.4% rise in the preceding quarter and leaving behind the 9.0%
fall in the year-earlier period.
The company reported the fourth 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.
Hot Topic recorded a 5.5% year-over-year rise in total sales for
the month, totalling $50.9 million.
July Sales Update
Hot Topic: Segment same-store sales moved up 6.2% in July 2011,
improving substantially from a 9.4% drop in the prior-year period.
Total sales of $39.3 million increased 4.5% year over year for the
month.
Torrid: Torrid registered same-store sales growth of 11.8%
compared with a decline of 7.2% in the prior-year period. Sales
improved 9.8% year over year to reach $11.6 million in the
month.
Preliminary Second Quarter Sales Update
For the second quarter of fiscal 2011, the company reported a
same-store sales increase of 2.6%, reversing the fall of 6.4% in
the prior-year period. Total sales for the period increased
marginally by 0.6% to $150.9 million.
Hot Topic: For the quarter, same-store sales increased 1.2%.
Despite the marginal increase, comparables improved considerably
from a drop of 6.5% in the prior-year quarter. Sales for the period
dipped 0.7% to $112.2 million.
Torrid: Torrid recorded same-store sales growth of 7.4% compared
with 6.0% in the year-ago period. Sales improved 5.3% year over
year to reach $38.7 million for the quarter.
Guidance
The company updated its estimate for second-quarter 2011 from a
loss per share between 9 cents and 11 cents to a loss per share of
8 cents a share.
We maintain our long-term Neutral recommendation on Hot Topic
Inc. The quantitative Zacks #1 Rank (short-term Strong Buy rating)
for the company indicates upward 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).
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