Hot Topic Inc.

Hot Topic, Inc. ( (HOTT - Analyst Report) is the #1 company in the retail industry using the Zacks Rank and has recently set a 52-week high.

Company Description

Hot Topic, Inc. is a rapidly growing, mall-based specialty retailer of music-licensed and music-influenced apparel, accessories and gift items for young men and women principally between the ages of 12 and 22. The company believes teenagers throughout the United States have similar fashion preferences, largely as a result of the nationwide influence of MTV, music distribution, movies, television programs and fashion magazines.

EPS up 13%

On Nov 19 Hot Topic announced its third-quarter results that included a 13% rise in net income to $7.4 million, up from $6.7 million. This translated to 17 cents per share, up from 15 cents one year ago.

Total sales for the quarter grew 4.7% to $197 million, up from $188 million in the third quarter of last year.

Management Ups its Guidance

During the third-quarter announcement the company forecast for earnings per share was between 25 cents and 28 cents for the fourth quarter. However, on Jan 7 the company saw a 4.3% increase in same-store sales which led to an increase in EPS to between 30 cents and 32 cents.

Full-Year Estimates Rising

Analysts have been revising estimates upward and full-year 2009 and 2010 estimates are not 43 cents and 48 cents, respectively. These figures represent a 20% and 11% growth on a year-over-year basis.

Hot Topic has met or beat expectations in each of the past 4 quarters.

The Chart

Not many retailers have found success during the slow economy we are in, however Hot Topic has managed to set a 52-week high twice during the holiday season of 2008. Take a look at the chart below.

Read the full analyst report on HOTT