Hot Topic Inc. reported results for its fiscal fourth quarter and fiscal year of 2011 (13 weeks and 52 weeks, respectively, ended January 28, 2012).
The company reported net income in the fourth quarter of $9.0 million, or $0.21 per share, compared to a net loss of $0.6 million, or $0.01 per share, for the comparable period last year. The fourth quarter results for last year include $9.8 million of expenses, for the implementation of the cost reduction plan.
On a non-GAAP basis, which excludes the cost reduction plan expenses, the fourth quarter 2010 results were net income of $0.12 per share.
For the fiscal year of 2011, the company reported a net loss of $1.8 million, or $0.04 per share, compared to a net loss of $8.2 million, or $0.18 per share, for last year. The results for fiscal 2011 include a charge of $16.6 million for the implementation of the strategic business changes and cost reduction plan.
The results for fiscal 2010 include a charge of $12.8 million for the implementation of the cost reduction plan and non-cash impairment of Shock Hound assets. On a non-GAAP basis, which excludes the charges for the strategic business changes, cost reduction plan and ShockHound impairment, fiscal year 2011 net income was $0.19 per share compared to a net loss of $0.01 per share for fiscal year 2010.
Total sales for the fourth quarter of fiscal 2011 decreased 1.2% to $209.9 million compared to $212.4 million for the fourth quarter last year. Total company comparable store sales increased 1.3% for the fourth quarter of fiscal 2011. A summary of the sales results by division was included in the January sales release.
The company's Board authorized an increase in the regular quarterly dividend to $0.08 per share from $0.07 per share, a 14% increase. Lisa Harper, Chief Executive Officer, commented, "By increasing our quarterly dividend, our Board of Directors has demonstrated its confidence in our strategic direction and our ability to execute to our plan."
"The strength of our balance sheet and the substantial free cash flow generated by our business provide us with the financial flexibility to return capital to our shareholders in this manner."
The company issued first quarter guidance (13 weeks ending April 28, 2012) of earnings per share in the range of $0.02 to $0.05, as compared to a loss per share of $0.17 last year, which included $12.4 million of expenses, or $0.17 per share, for the charges related to strategic business changes and cost reduction plan.
This guidance is based upon a comp store sales increase in the mid-single-digit percentage range. Starting in the first quarter of fiscal 2012, the company will report internet sales in its comp store sales results.
At the end of the fourth quarter of fiscal 2011, the company operated 628 Hot Topic stores and 148 Torrid stores compared to 657 Hot Topic stores and 153 Torrid stores at the end of the fourth quarter of fiscal 2010. During the fourth quarter of fiscal 2011, the company closed six Hot Topic stores, opened four Torrid stores and closed two Torrid stores.
Hot Topic Inc. is a mall and web based specialty retailer operating the Hot Topic and Torrid concepts. Hot Topic offers music/pop culture-licensed and music/pop culture-influenced apparel, accessories, music and gift items for young men and women. Torrid offers apparel, lingerie, shoes and accessories designed for various lifestyles for young plus-size women.
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