Excerpt from our Wall Street Breakfast, a one-page summary of this morning's key market-moving and stock-moving stories:
Hot Topic Meets Targets [TheStreet.com]
Summary: Hot Topic, a rock music clothing and accessories retailer, met Wall Street expectations when it reported a 19% rise in net income, and news that its revamped store design has met with customer approval brought HOTT shares up 9%. This upturn follows significant losses for the first and second quarter, and executives say that the recent success is due to higher markups, cost-cutting strategies and lowered freight expenses. Reported net income was $7.1 million, or 16 cents per share, up from $5.9 million or 13 cents a share for the third quarter last year. Sales increased 2% to $196.7 million, slightly under the expected $198.3 million, and same store sales decreased 6.8%. Videos and accessories slowed down same-store sales, while the company plans to increase sales by remodeling stores and eschewing the dark "Goth" appearance of older stores in favor of a brighter decor which is expected to appeal to younger shoppers. Hot Topic plans to remodel 60 to 80 of its stores and to build 15 new stores.
Related links: Media coverage: Reuters • Associated Press . Commentary: Teen Stocks - Tempting or Tempestuous?
Potentially impacted stocks and ETFs: Hot Topic (NASDAQ:HOTT) • Competitors: Abercrombie & Fitch (NYSE:ANF), Gap (NYSE:GPS), American Eagle Outfitters (AEOS), Pacific Sunwear (NASDAQ:PSUN)
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