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Mar 4, 2011
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Teen retailers Zumiez, Hot Topic Feb comps trump Street

By
Reuters
Published
Mar 4, 2011

March 2 - Zumiez Inc's February same-store sales breezed past analysts' estimates as the sports apparel retailer's merchandise continued to resonate well with younger customers, while teen retailer Hot Topic Inc posted a smaller-than-expected decline.

Hot Topic, zumiez
You can shop for Billabong for guys and girls at Zumiez

Shares of Everett, Washington-based Zumiez were up 6 percent in extended trade after closing at $25.94 on Wednesday on Nasdaq.

"Zumiez was facing tougher comps and, in general, retail sales in February holded very well," William Blair & Company analyst Sharon Zackfia said.

Zumiez's continued strong same-store sales is trading more optimism that they will continue to have good comps for the rest of the year, Zackfia said, adding the stock is reacting to that.

Zumiez, which sells clothing and equipment to skaters and snowboarders, said sales at stores open at least a year rose 12.8 percent in February. Analysts were expecting an increase of 4.2 percent, according to Thomson Reuters data.

In December, the company had missed comparable store estimates for the first time in seven months, but beat again in January.

Hot Topic, which sells licensed music and movie apparel, posted a 1.4 percent drop in February same-store sales. It was expected to post a 5 percent fall, according to Thomson Reuters data.

"Hot Topic's outperformance was more relative to its Torrid concept (which targets plus-size women)...which was better than what the Street was looking for," Zackfia said.

Hot Topic, which has mostly underperformed its peers over the past one year as its merchandise mix failed to lure customers, said sales at its music segment were up 18 percent for the month.

Retailers are expected to report better same-store sales results in February, compared with January when a severe winter had forced shoppers to postpone purchases.

Shares of San Jose, California-based Hot Topic closed at $5.28 on Nasdaq.

(Reporting by NR Sethuraman in Bangalore; Editing by Anne Pallivathuckal, Sriraj Kalluvila)

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