Two months ago I pitted a struggling Hot Topic
Hot Topic's malaise continues as comps fell by 8.7% in August. Meanwhile, American Eagle had a huge month with same-store sales surging 23.9% higher.
Things couldn't be better for American Eagle these days. It initiated a quarterly cash dividend, and while it had originally told investors to hold out for $0.47 a share in earnings during the current quarter, the company is now confident that it will earn about a dime a share more than that sum.
It's a dramatic case of divergence like this that makes one wonder why some folks resort to counting parked cars at a shopping mall to diagnose the health of specialty retail. Unless you are actually buying into a mall operator such as Mills
If a typical Hot Topic and American Eagle in the same mall are sporting such wide differences at the cash register, it's important to detach yourself from the health of the sector in general and single out the winners that are doing well while weeding out those faring poorly.
A good read on that front can usually come early during every month when companies announce the same-store sales sums from the month before. It wasn't just Hot Topic and American Eagle providing night-and-day results yesterday. Aeropostale
So, yes, those malls are big, cozy boxes, but as investors, you have to think outside the box.
Why do some specialty retailers get it while others don't? Is location inside a mall that important? Do I match? All this and more in the What to Wear? discussion board. Only on Fool.com.
Longtime Fool contributor Rick Munarriz enjoys the mall -- even the food court. He does not own shares in any companies mentioned in this story.