Hot Topic 3rd-quarter net income jumps 38 percent
CITY OF INDUSTRY, Calif. (AP) — Teen retailer Hot Topic Inc. said Wednesday its third-quarter net income jumped 38 percent, as improved merchandising and a new selection of fashions drew in more customers.
For the three months ended Oct. 27, Hot Topic earned $4.3 million, or 10 cents per share, up from $3.1 million, or 7 cents per share, in the 2011 third quarter. Revenue rose 2 percent to $179.4 million from $175.8 million.
Analysts, on average, expected earnings of 9 cents per share on $182.9 million in revenue, according to FactSet.
The City of Industry, Calif.-based company said its revenue at stores open at least a year rose 0.2 percent. The metric is a key measure of a retailer's health, because it excludes revenue at stores that recently opened or closed.
Hot Topic said that customers responded well to the fashions at its Torrid stores and a new vertical sourcing model significantly boosted its profitability at that brand. Meanwhile, the Hot Topic stores experienced better demand for fashion apparel and t-shirts, the company said.
The company's cost of goods sold, including buying, distribution and occupancy costs edged down less than a percent to $115.2 million.
Hot Topic's board declared a regular quarterly dividend of 8 cents that will be paid on Dec. 28 to shareholders of record as of Dec. 14. The company said it pushed up its fourth quarter dividend, typically paid in January, to allow shareholders to benefit from a lower dividend tax rate that is set to expire at the end of the year.
Hot Topic shares rose 6 cents to close at $8.56. Shares were unchanged in aftermarket trading following release of the results.