CITY of INDUSTRY, Calif., March 10, 2010 (GLOBE NEWSWIRE) -- Hot Topic, Inc. (Nasdaq:HOTT), reported results for its fiscal fourth quarter and fiscal year of 2009 (13 weeks and 52 weeks, respectively, ended January 30, 2010).
The company reported net income in the fourth quarter of $8.0 million, or $0.18 per diluted share, compared to $14.2 million, or $0.32 per diluted share, for the comparable period last year. For the fiscal year of 2009, the company reported net income of $11.9 million, or $0.27 per diluted share, compared to $19.7 million, or $0.45 per diluted share, for last year. These results include expenses related to ShockHound (www.shockhound.com) of approximately $0.02 per share and $0.07 per share in the fourth quarter and fiscal year 2009, respectively.
As previously reported, a summary of the sales results by division (including internet) is as follows:
| Net Sales |
Comparable Store Sales % Change |
|||
|
$ Millions |
% Change To Last Year |
This Year |
Last Year |
|
| FOURTH QUARTER: | ||||
| Hot Topic | 174.2 | -12.4% | -13.5% | 6.5% |
| Torrid | 40.0 | 1.7% | 0.0% | -2.7% |
| Total Co. | 214.2 | -10.0% | -11.5% | 5.2% |
| FISCAL YEAR: | ||||
| Hot Topic | 579.8 | -4.5% | -5.6% | 1.8% |
| Torrid | 156.9 | 1.6% | -2.9% | -2.4% |
| Total Co. | 736.7 | -3.2% | -5.1% | 1.0% |
At the end of the fourth quarter of fiscal 2009, the company operated 680 Hot Topic stores and 156 Torrid stores compared to 681 Hot Topic stores and 159 Torrid stores at the end of the fourth quarter of fiscal 2008. During the fourth quarter of fiscal 2009, the company opened one Hot Topic and closed one Hot Topic store. The company also remodeled two Hot Topic stores during the quarter, bringing the total number of remodeled or relocated stores during fiscal 2009 to 16.
The company issued first quarter guidance (13 weeks ending May 1, 2010) of a loss per share in the range of $0.02 to $0.05, as compared to earnings per share of $0.03 last year. This guidance is based upon a comp store sales decline in the high-single-digit percentage range. Included in the guidance is approximately $0.02 per share of expense related to ShockHound (www.shockhound.com), the company's online music site.
A conference call to discuss fourth quarter and fiscal year results, business trends, guidance and other matters is scheduled for March 10, 2010 at 4:30 PM (ET). The conference call number is 866-314-5050, pass code "Hot Topic", and will be accessible to all interested parties. It will also be webcast on the company's Investor Relations website located at http://investorrelations.hottopic.com. A replay of the conference call will be available at 888-286-8010, pass code 73430006, for approximately two weeks. In addition, a webcast replay of the conference call will be available on the company's Investor Relations website for approximately two weeks.
In our February sales commentary, we reported Hot Topic Division comparable store sales for music, license, fashion apparel and fashion accessories categories. To provide investors with a historical perspective, we will post a 2-year history of the category comparable store sales results on the company's investor relations website.
Hot Topic, Inc. is a mall and web based specialty retailer operating the Hot Topic and Torrid concepts, as well as the e-space music concept, ShockHound. Hot Topic offers music/pop culture-licensed and music/pop culture-influenced apparel, accessories, music and gift items for young men and women principally between the ages of 12 and 22. Torrid offers apparel, lingerie, shoes and accessories designed for various lifestyles for plus-size females principally between the ages of 15 and 29. ShockHound (www.shockhound.com) is a one-stop, genre-spanning music website where people of all ages can purchase MP3s and music merchandise, share their music interests, and read music news and editorial content. As of January 30, 2010, the company operated 680 Hot Topic stores in all 50 states and Puerto Rico, 156 Torrid stores, and Internet stores www.hottopic.com, www.torrid.com and www.shockhound.com.
In addition to historical information, this news release and the aforementioned conference call contain forward-looking statements, which may include statements relating to financial results, guidance, store operations, closures, remodels and relocations, projections and other financial performance. These statements involve risks and uncertainties, including risks and uncertainties associated with meeting expected financial results, fluctuations in sales and comparable store sales results, our online music site, music, licensing and fashion trends, competition from other retailers, uncertainties generally associated with specialty retailing, technology and other risks associated with Internet sales, the effect of negative conditions in the economic environment (including global capital and credit markets), the effect of severe weather or natural disasters, political and/or social changes or events that could negatively impact shopping patterns and/or mall traffic, relationships with mall developers and operators, relationships with our vendors, litigation proceedings and contingent liabilities, as well as other risks detailed in the company's SEC reports including its Annual Report on Form 10-K for the year ended January 31, 2009 and its Quarterly Reports on Form 10-Q. Historical results achieved are not necessarily indicative of the future prospects of the company, and actual results or circumstances could differ materially from the forward-looking statements.
|
HOT TOPIC, INC. CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share amounts) (Unaudited) |
||
| Fourth Quarter Ended | ||
| Jan. 30, 2010 | Jan. 31, 2009 | |
| Net sales | $214,224 | $237,973 |
| Cost of goods sold, including buying, | ||
| distribution and occupancy costs | 137,649 | 146,042 |
| Gross margin | 76,575 | 91,931 |
| Selling, general & administrative expenses | 63,388 | 69,027 |
| Income from operations | 13,187 | 22,904 |
| Interest income, net | 73 | 372 |
| Income before income taxes | 13,260 | 23,276 |
| Provision for income taxes | 5,277 | 9,116 |
| Net income | $7,983 | $14,160 |
| Earnings per share: | ||
| Basic | $0.18 | $0.32 |
| Diluted | $0.18 | $0.32 |
| Weighted average shares outstanding | ||
| Basic | 44,331 | 43,873 |
| Diluted | 44,395 | 44,209 |
| Year Ended | ||
| Jan. 30, 2010 | Jan. 31, 2009 | |
| Net sales | $736,710 | $761,074 |
| Cost of goods sold, including buying, | ||
| distribution and occupancy costs | 480,453 | 487,769 |
| Gross margin | 256,257 | 273,305 |
| Selling, general & administrative expenses | 237,010 | 242,483 |
| Income from operations | 19,247 | 30,822 |
| Interest income, net | 519 | 1,670 |
| Income before income taxes | 19,766 | 32,492 |
| Provision for income taxes | 7,886 | 12,750 |
| Net income | $11,880 | $19,742 |
| Earnings per share: | ||
| Basic | $0.27 | $0.45 |
| Diluted | $0.27 | $0.45 |
| Weighted average shares outstanding | ||
| Basic | 44,134 | 43,789 |
| Diluted | 44,409 | 44,913 |
|
HOT TOPIC, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited) |
|||
| Jan. 30, 2010 | Jan. 31, 2009 | ||
| Current Assets: | |||
| Cash, cash equivalents and short-term investments | $123,065 | $97,510 | |
| Inventory | 76,483 | 79,923 | |
| Prepaid expenses and other | 14,395 | 13,897 | |
| Deferred tax assets | 6,192 | 6,365 | |
| Total current assets | 220,135 | 197,695 | |
| Property and equipment, net | 140,252 | 155,290 | |
| Deposits and other | 3,304 | 1,607 | |
| Long-term investments | 8,192 | 8,402 | |
| Deferred tax assets | 4,511 | 7,577 | |
| Total assets | $376,394 | $370,571 | |
| Current Liabilities: | |||
| Accounts payable | $20,235 | $19,457 | |
| Accrued liabilities | 40,824 | 45,055 | |
| Income taxes payable | 545 | 7,601 | |
| Total current liabilities | 61,604 | 72,113 | |
| Deferred rent and other | 32,376 | 36,909 | |
| Deferred compensation liability | 2,987 | 1,273 | |
| Income taxes payable | 2,380 | 1,850 | |
| Total liabilities | 99,347 | 112,145 | |
| Total shareholders' equity | 277,047 | 258,426 | |
| Total liabilities and shareholders' equity | $376,394 | $370,571 | |
|
OTHER DATA (Dollars in thousands) (Unaudited) |
|||
| Year Ended | |||
| Jan. 30, 2010 | Jan. 31, 2009 | ||
| Depreciation and amortization | $38,317 | $38,328 | |
| Capital expenditures | $24,332 | $23,257 | |
| Number of stores open at end of period: | |||
| Hot Topic | 680 | 681 | |
| Torrid | 156 | 159 | |
| Stores square footage | 1,585,500 | 1,593,300 | |