Hot Topic Quarterly EPS in Line

Hot Topic Inc. (HOTT - Analyst Report), a shopping mall-based specialty retailer, reported fiscal 2009 fourth quarter earnings of $8.0 million or $0.18 per share, compared to $14.2 million or $0.32 in the year-earlier quarter.

For fiscal 2009, the company reported a net income of $11.9 million or $0.27 per share compared to $19.7 million or $0.45 in the previous fiscal. While the quarterly earnings were in line with the Zacks Consensus Estimate, the fiscal earnings missed the same by a penny.
 
Total net sales during the quarter decreased 10.0% to $214.2 million from $238.0 million in the year-ago quarter. Net sales in the Hot Topic segment fell 12.4% year-over-year, and increased 1.7% in the Torrid segment during the quarter.

For fiscal 2009, Hot Topic reported net sales of $736.7 million – a decrease of 3.2% year-over-year. While net sales in the namesake segment declined 4.5% during the fiscal, net sales in the Torrid segment increased 1.6% year-over-year.
 
Hot Topic recorded an 11.5% reduction in same-store sales during the quarter. For fiscal 2009, same-store sales dipped 5.1% year-over-year. The decline was primarily caused by the continuing macroeconomic headwinds, which forced customers to pull back on discretionary spending, such as fashionable apparel and accessories.
 
Hot Topic’s gross profit decreased to $76.6 million during the quarter from $91.9 million in the year-ago period. For fiscal 2009, gross profit decreased to $256.3 million from $273.3 million in the previous fiscal. Hot Topic recorded an operating income of $13.2 million during the quarter, compared to $22.9 million in the year-ago quarter. For fiscal 2009, operating income declined to $19.2 million from $30.8 million in the previous fiscal.
 
Hot Topic ended the quarter with cash and cash equivalents of $123.1 million, compared to $97.5 million in the year-ago quarter. During the quarter, the company remodeled two Hot Topic stores, bringing the total number of remodeled or relocated stores during fiscal 2009 to 16.
 
Moving forward, the company expects fiscal 2010 first quarter loss in the range of $0.02 to $0.05 per share, with a decrease in same-store sales in the high single digits.

Read the full analyst report on HOTT