Hot Topic Inc.
) posted positive sales results for the first quarter ended May
4, 2013, while comparable-store sales (comps) remained negative
in the quarter.
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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
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
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.
Build-A-Bear Workshop Inc.
) , all of which carry a Zacks Rank #1 (Strong Buy).