Hot Topic's 1Q Comps Decline - Analyst Blog
May 09 2013 - 10:15AM
Zacks
Hot Topic Inc. (HOTT) posted positive sales
results for the first quarter ended May 4, 2013, while
comparable-store sales (comps) remained negative in the
quarter.
Calif. based company saw its comps decline 1.6% compared with a
7.5% increase reported in the comparable year-ago period. The
decline in comps was driven by weak results at the company’s
namesake stores, offset slightly by improved sales at the Torrid
division. Comps at the company’s namesake stores dipped 2.4%, while
Torrid stores witnessed a 1.0% jump in comps.
The company’s net sales for the quarter increased 1.9% year over
year to $174.8 million, on account of robust sales at the Torrid
stores.
On a segmental basis, net sales declined 1.5% year over year to
$121.8 million at the company’s namesake stores, while Torrid
stores registered a 10.7% increase in sales of $53.0 million.
Management believes the success of the company’s Torrid store
concepts, through new Torrid branding and vertical product
strategies has strengthened the brand’s unit growth
opportunity.
Hot Topic’s core business strategy focuses on music/pop culture
related merchandise, based on the foundation of the pop culture and
mainly targets customers in the teenage group. As of May 4, 2013,
the company operated 621 Hot Topic stores across 50 states in the
U.S., in Puerto Rico and in Canada, 195 Torrid outlets and 9
Blackheart stores. The company’s e-Commerce business looks strong
and it runs 3 e-Commerce sites - hottopic.com, torrid.com and
blackheartlingerie.com.
Currently, Hot Topic has a Zacks Rank #2 (Buy). Other stocks that
continue to perform well in the retailing space are Big 5
Sporting Goods Corp. (BGFV ), Build-A-Bear
Workshop Inc. (BBW) and Cabela’s Inc.
(CAB ) , all of which carry a Zacks Rank #1 (Strong Buy).
BUILD-A-BEAR WK (BBW): Free Stock Analysis Report
BIG 5 SPORTING (BGFV): Free Stock Analysis Report
CABELAS INC (CAB): Free Stock Analysis Report
HOT TOPIC INC (HOTT): Free Stock Analysis Report
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