The 10-second takeaway
For the quarter ended April 28 (Q1), Hot Topic beat slightly on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue grew and GAAP earnings per share grew.
Margins increased across the board.
Hot Topic reported revenue of $171.6 million. The two analysts polled by S&P Capital IQ wanted to see net sales of $169.4 million on the same basis. GAAP reported sales were 6.4% higher than the prior-year quarter's $161.3 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 $0.09. The four earnings estimates compiled by S&P Capital IQ predicted $0.08 per share. GAAP EPS were $0.09 for Q1 against -$0.17 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 36.0%, 470 basis points better than the prior-year quarter. Operating margin was 3.5%, 860 basis points better than the prior-year quarter. Net margin was 2.2%, 700 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $158.6 million. On the bottom line, the average EPS estimate is -$0.05.
Next year's average estimate for revenue is $737.6 million. The average EPS estimate is $0.38.
The stock has a one-star rating (out of five) at Motley Fool CAPS, with 207 members out of 381 rating the stock outperform, and 174 members rating it underperform. Among 118 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 43 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 $10.80.
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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.