The 10-second takeaway
For the quarter ended Jan. 28 (Q4), Hot Topic beat slightly on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue shrank slightly and GAAP earnings per share expanded.
Gross margins dropped, operating margins increased, net margins improved.
Hot Topic logged revenue of $209.9 million. The five analysts polled by S&P Capital IQ wanted to see revenue of $206.7 million on the same basis. GAAP reported sales were 1.2% lower than the prior-year quarter's $212.4 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 $0.21. The eight earnings estimates compiled by S&P Capital IQ anticipated $0.20 per share. GAAP EPS were $0.21 for Q4 versus -$0.01 per share for the prior-year quarter.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 35.4%, 2,150 basis points worse than the prior-year quarter. Operating margin was 7.1%, 780 basis points better than the prior-year quarter. Net margin was 4.3%, 460 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $169.9 million. On the bottom line, the average EPS estimate is $0.00.
Next year's average estimate for revenue is $725.4 million. The average EPS estimate is $0.28.
The stock has a one-star rating (out of five) at Motley Fool CAPS, with 205 members out of 373 rating the stock outperform, and 169 members rating it underperform. Among 115 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 41 give Hot Topic a green thumbs-up, and 74 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 $8.50.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.