Hot Topic (NASDAQ:HOTT) has 680 mall-based stores in the US and Puerto Rico where it sells accessories and clothes to the youth market (ages 12 to 22). HOTT will report first quarter earnings today, Wednesday the 20th of May, where the EPS estimate is approximately 0.018.
The consumer discretionary sector has seen an average decrease in utilization (the measure of supply and demand in the securities lending market) over the last month and is now at 14.55%. HOTT has a significantly higher utilization rate of 49% - this is has increased 55% over the last three months . Over the same period the short base (as measured by Percent Shares Outstanding on Loan) has increased 52% to 21% of shares outstanding out on loan. This would indicate that the increase in utilization was down to new short position while inventory available to borrow has remained fairly static.
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