Hot Topic Releases 4Q Sales Results - Analyst Blog
February 02 2012 - 12:13PM
Zacks
Hot Topic Inc. (HOTT), a shopping-mall based
retail chain, reported sales results for the fourth quarter ending
January 28, 2012.
Hot Topic’s fiscal fourth-quarter 2011 comparable store sales
(comps) was up 1.3% compared with negative comps of 2.1% reported
in the year-ago period. Comps increase in the quarter was driven by
a 2.2% rise in comps at the company’s namesake stores, offset by a
3.2% decline recorded at the Torrid stores.
For fiscal year 2011, the company’s comps inched up 0.6%, with a
0.1% comps increase at the namesake stores and a 2.5% rise in
Torrid comps. Yearly comps in 2011 compare to negative comps
of 5.3% reported in fiscal 2010.
However, Hot Topic’s net sales for the fourth quarter dipped
1.2% year over year to $209 million, on account of sales decline at
both namesake and Torrid concepts. Quarterly sales, however, fared
better than the Zacks Consensus Estimate of $207 million. Fiscal
year sales also declined 1.5% from last year to $697.9 million.
Following better-than-expected sales results, Hot Topic lifted
its earnings guidance for the fourth quarter to 19 cents – 20 cents
per share, compared with its prior guidance range of 17 cents -19
cents per share and above last year’s earnings per share of $0.12.
The current Zacks Consensus Estimate for the fourth quarter stands
at 18 cents, which is below the company’s revised guidance
range.
Hot Topic is scheduled to release complete fourth quarter and
fiscal 2011 results on March 7, 2012.
Hot Topic mainly competes with teenage-focused retailers such as
Abercrombie & Fitch Company (ANF) and
American Eagle Outfitters Inc. (AEO). The company
also competes with Wal-Mart Stores Inc. (WMT) and
Best Buy Company (BBY), among others.
We reiterate our Neutral recommendation on Hot Topic as
macroeconomic headwinds, intense competition and seasonal nature of
the business undermine the company’s future growth prospects.
However, the company has a Zacks #4 Rank, implying a short-term
Sell rating.
AMER EAGLE OUTF (AEO): Free Stock Analysis Report
ABERCROMBIE (ANF): Free Stock Analysis Report
BEST BUY (BBY): Free Stock Analysis Report
HOT TOPIC INC (HOTT): Free Stock Analysis Report
WAL-MART STORES (WMT): Free Stock Analysis Report
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