HOTT-
Great short off of this pop
They're so excited their rock and roll faddish merchandise sales weren't off as much as notoriously wrong analysts expected that they're giving away half their savings in hopes of buying some shareholders for a day.
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UPDATE 3-Hot Topic's dividend, same-store beat drive shares
Wed Apr 7, 2010 6:37pm EDT
Stocks
Hot Topic, Inc
HOTT.O
$7.06
-0.04-0.56%
12:00am EDT
* Announces special cash div of $1/shr
* Initiates regular dividend of 7 cents/shr
* March same-store sales down 7.5 vs est -11.2 pct
* Shares jump 18 pct after mkt (Recasts; adds details, analyst comments)
By Nivedita Bhattacharjee
BANGALORE, April 7 (Reuters) - Hot Topic Inc (HOTT.O) set a $1 special dividend and also initiated a regular quarterly dividend as it looked to return some of its $100 million cash pile to shareholders, sending its shares up 18 percent after market.
Also on Wednesday, March same-store sales at the retailer came in ahead of estimates, partly helped by an early Easter and good performance at its Torrid division.
Hot Topic, which sells rock 'n' roll-inspired clothing as well as music and accessories to teenagers, said it will pay a $1-per-share special one-time cash dividend and a 7 cents-per-share regular quarterly dividend to shareholders as of April 19.
"Given Hot Topic's cash on the balance sheet (plus $100 million entering the first quarter) and desire to limit new store openings, the dividend seems like a logical way to return cash to shareholders," Wall Street Strategies analyst Brian Sozzi said.
"Additionally, it could very well signal a confidence in the outlook for the business that has been lacking for some time," he added.
Same-store sales, or sales at stores open for at least a year, was down 7.5 percent, while analysts on average were expecting a drop of 11.2 percent, according to Thomson Reuters data.
While the numbers may back expectations that March same-store sales will be the best that retailers will have posted in the recent past, Hot Topic is still the only teen retailer expected to post negative same-store sales, according to Thomson Reuters data. [ID:nSGE6220JX]
Unlike most others, the company -- coming off the popularity of its "Twilight" merchandise last year -- is up against tougher year-on-year comparisons.
The Thomson Reuters Same Store Sales Index is expected to post a 6.3 percent comparable for March when most retailers report on Thursday -- the best showing since last year's 7.6 percent rise.
"While Hot Topic will have trailed its peers this March, signs of progress at the core merchandise level ... coupled with an under-the-radar story at Torrid (three months of positive comps) are warranting of an increase in our EPS assumption for the full year," analyst Sozzi said.
The analyst raised his full-year earnings estimates for the company to 40 cents a share from 36 cents a share.
Excluding Twilight Saga merchandise from both this year and last, comp store sales were up about 4 percent, Chief Financial Officer Jim McGinty said on a pre-recorded call.
Same-store sales at its namesake division fell 11.2 percent, while the Torrid, which caters to plus-size women and girls, grew 7.5 percent.
Shares of the company shot up 18 percent to $8.34 after the bell. They closed at $7.06 Wednesday on Nasdaq. (Reporting by Nivedita Bhattacharjee; Editing by Unnikrish |
