* Zumiez July comps beat Street view
* Hot Topic July comps fall short of estimates
* Zumiez raises Q2 outlook
* Hot Topic sees Q2 loss of $0.14
* Hot Topic shares down 4 pct, Zumiez down 1 pct
(Adds details, analyst comment, updates share movement)
By Shradhha Sharma
BANGALORE, Aug 4 (Reuters) - Teen apparel retailer Zumiez
Inc's (ZUMZ.O) July same-store sales topped estimates, while
that of Hot Topic Inc (HOTT.O) fell short of analysts'
expectations as it sold fewer higher-ticket items and increased
promotional spending.
Zumiez, which sells clothing and equipment for skaters,
snowboarders and the like, saw robust sales for its
accessories, footwear and at its men's and boy's categories,
the company said on a pre-recorded call.
Warmer weather also helped drive more traffic to Zumiez
stores, but a boost from the crucial back-to-school shopping
season will only be seen in August, Wedbush Securities analyst
Betty Chen said.
U.S. consumers are expected to delay back-to-school
shopping into August this year as well in the hopes of finding
good bargains, which could hurt July numbers for a lot of other
teen apparel retailers that are slated to report comparable
sales on Thursday.
"(The hot weather) drove a little bit more of mall traffic
and compelled people to buy some wear-now clothes -- like
T-shirts and shorts, especially since a lot of these items were
on sale," Chen added.
Same-store sales rose 9.4 percent in July, compared with
analysts' estimate of an increase of 8.5 percent, according to
Thomson Reuters Data.
Total July sales at Zumiez jumped 15 percent, prompting the
company to raise its second-quarter outlook.
Zumiez now sees a quarterly loss in the range of 2 cents a
share to 3 cents a share, up from its previous expectation of a
loss of between 7 cents a share and 10 cents a share.
Bundling promotions -- where consumers get a discount for
purchasing a specific number of units from a designated
category -- also lifted July same-store sales at Zumiez, MKM
Partners analyst Linda Tsai said.
But Zumiez's bundling promotions, a major business driver till
now, could be pressured with other retailers raising the bar on
their promotional offers, Wedbush analyst Chen said.
The Thomson Reuters Same-Store Sales Index is expected to
post a 3.1 percent rise in July 2010 comparable sales,
reversing last year's fall of 5.1 percent, and making July the
11th straight month of improving sales.
However, Hot Topic failed to live up to expectations,
posting a 9 percent drop in same-store sales, much wider than
analysts' estimate of a 2.6 percent fall.
Citing lower-than-expected sales, the retailer also
forecast a loss of 14 cents a share for the second quarter.
On a pre-recorded call, the company said sales for
accessories and fashion apparel slumped 9 percent and 24
percent respectively in July.
Comparable sales at its Torrid stores fell 7.2 percent.
Hot Topic continues to expect consolidated inventory to be
down in the low single digit percentage range at the end of
this quarter, the company said on the call.
The company, which sells rock 'n' roll-inspired apparel and
accessories, was a great success last year when it began
selling "Twilight" related merchandise.
However, as the movie gained popularity, other retailers
have done the same, eating into Hot Topic's exclusivity, and
with time, the unique-quotient has died down.
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