(Same Store Sales) comparisons to be reported tomorrow by HOTT (Hot Topic, Inc.) another of my favorites. HOTT is a national retailer with over 150 mall locations across the U. S. HOTT will open 40 to 50 new stores in 1999. HOTT shares closed today at 13 7/8 bid offered at 14 on 77,800 shares volume with a 14 last sale.
I have been expecting "negative" SSS reporting in the single digits. Today, two analysts of Alex Brown reported their (new) guestimate as well as posted their old guesstimate, which was for negative 10 %. They now claim, with some guidance given them, SSS will be improved from their intial guesstimates of negative 10 %. SSS comparisons should be reported after the close on Wednesday 2/3.
This will come as a pleasant surprise. HOTT shares, in early December 98 traded at 23 before tanking 10 points due to the guesstimate of SSS being released in the negative 10 % area. It turned out they were negative 7.2 % after 9 weeks, however the company reported the 9th week was actually up 10 %.
Nevertheless the stock was pounded and fell into the 12's and has been trading for weeks in the low to mid 13's and just today had it's highest close in 4 to 5 weeks, closing at 14.
HOTT has a PE ratio of 12 and 4.8 M shares outstanding with a float of 2 M. As of 12/15/98, HOTT had 215 K shares short. On January 4, 1999 HOTT's management announced a buy back of up to 250 K shares in open market transactions. Along with the upcoming reporting of SSS, the company should hopefully announce the progress of their buy back, if it has begun. An improvement in SSS versus expectations, coupled with 10 % of their float being short and adding they are in the midst of a 250 K buyback can be a real spark helping to move HOTT shares higher.
With an improvement in SSS comparisons compared to what was initially projected, HOTT shares should once again move back to the levels truly reflecting their 35 % annual growth rate.
The market destroyed PSUN (Pacific Sunwear) shares in late November for the same reason with a guess of negative SSS. When PSUN reported actual positive SSS in early January, their shares which dived from 24 to 12 moved back up to trade back over 24 and have already peaked over 27.
The same potential exists for HOTT shares.
HOTT has a website and is presently used for ecommerce. It is:
http://www.hottopic.com Go visit their site and you will view their product line and see some of their specials listed as well as a store list of their locations across the United States.
-------------------------------------------------------------------------------- Posted: Feb 2 1999 5:48PM EST as a reply to: Msg 1 by YahooFinance
business section of today's Philadelphia Inquirer. Great article ... a must read!! Headline is "Electronics Boutique woos video-committed youths. The article says, ElBO currently has 534 stores but plans to open 100 more stores before November 1, 1999. It also mentions ELBO's focus on E-Commerce and how the company online business is "profitable and growing". Elbo sold $800,000 worth of advertising to vendors on there web site. The article also talks about ELBO's commitment to their customers. Evidently, ELBO had 80,000 customers that had "pre-paid" for a copy of the game. So, when Zelda came out, ELBO sent a huge truck to Nintendo 64's distribution center in Seattle, obtained its allocation, took it to a leased warehouse in Seattle, sorted it by store and shipped it Federal Express that night to its stores around the nation. Talk about going the extra yard for you cutomer. I quess that is why their cutomers are so loyal. Anyway, it's a great article and tied to the Emerald asset management seminar (which can be heard over the internet) later today...this should be a good day for ELBO. IMHO Good luck ELBO longs, Rather_be_long