The 10-second takeaway
For the quarter ended Oct. 27 (Q3), Hot Topic missed estimates on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue grew slightly and GAAP earnings per share grew significantly.
Margins expanded across the board.
Hot Topic chalked up revenue of $179.3 million. The six analysts polled by S&P Capital IQ predicted revenue of $184.6 million on the same basis. GAAP reported sales were 2.0% higher than the prior-year quarter's $175.8 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.10. The seven earnings estimates compiled by S&P Capital IQ predicted $0.09 per share. GAAP EPS of $0.10 for Q3 were 43% higher than the prior-year quarter's $0.07 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 35.8%, 190 basis points better than the prior-year quarter. Operating margin was 3.8%, 120 basis points better than the prior-year quarter. Net margin was 2.4%, 60 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $225.5 million. On the bottom line, the average EPS estimate is $0.25.
Next year's average estimate for revenue is $737.2 million. The average EPS estimate is $0.41.
The stock has a one-star rating (out of five) at Motley Fool CAPS, with 206 members out of 379 rating the stock outperform, and 173 members rating it underperform. Among 119 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 44 give Hot Topic a green thumbs-up, and 75 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Hot Topic is outperform, with an average price target of $12.06.
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