On May 23, Hot Topic (NASDAQ:HOTT) released first-quarter earnings for the period ended May 5.
- In spite of a 2.3% decline in comparable-store sales, revenues increased by 2.1%.
- During the quarter, the company opened two Hot Topic stores and closed one; it remodeled or relocated 17 others. It currently operates 826 Hot Topic and Torrid stores.
- For the second quarter, management expects earnings per share to be in the range of $0.02-$0.04.
(Figures in millions, except per-share data.)
Income Statement Highlights
|
Q1 2007 |
Q1 2006 |
Change | |
|---|---|---|---|
|
Sales |
$157.3 |
$154.0 |
2.1% |
|
Net Profit |
($0.8) |
($1.4) |
N/A |
|
EPS |
($0.02) |
($0.03) |
N/A |
|
Diluted Shares |
44.2 |
44.1 |
0.4% |
Get back to basics with the income statement.
Margin Checkup
|
Q1 2007 |
Q1 2006 |
Change* | |
|---|---|---|---|
|
Gross Margin |
32.8% |
31.3% |
1.5 |
|
Operating Margin |
(1.2%) |
(1.7%) |
0.6 |
|
Net Margin |
(0.5%) |
(0.9%) |
0.4 |
Margins are the earnings engine.
Balance Sheet Highlights
|
Assets |
Q1 2007 |
Q1 2006 |
Change |
|---|---|---|---|
|
Cash + ST Invest. |
$49.2 |
$26.4 |
86.1% |
|
Inventory |
$75.1 |
$82.4 |
(8.9%) |
|
Liabilities |
Q1 2007 |
Q1 2006 |
Change |
|---|---|---|---|
|
Accounts Payable |
$21.6 |
$27.5 |
(21.6%) |
The balance sheet reflects the company's health.
Cash Flow Highlights
The company gave us enough information to calculate owner's earnings, but that doesn't cut it for a retail operation that requires lots of working capital. Looks like we'll have to wait for the 10-Q for the cash flow information.
Free cash flow is a Fool's best friend.
Related Foolishness:
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