Retail Winners In Hard Times (ARO, APP, HOTT, BKE)

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There are actually a few bright spots in retail despite an economy that is still getting worse and an environment where the consumer is getting poorer and less certain about their job prospects.  Among the companies highlighted are Aeropostale Inc. (NYSE: ARO), American Apparel, Inc. (AMEX: APP), Hot Topic Inc. (NASDAQ: HOTT), and The Buckle, Inc. (NYSE: BKE).

Aeropostale Inc. (NYSE: ARO) is only trading higher by a marginalbasis.  It is surprising that the stock iis not higher even whenyou consider the huge move off its 52-week lows.  The company’ssame-store sales were up 12% in December, which is the same for theDecember 2007 period gains.  It also said earnings for Q4 would be $0.90 to$0.92, ahead of the $0.87 estimates from First Call and above itsprior guidance of $0.84 to $0.90.

American Apparel, Inc. (AMEX: APP) is trading higher after posting a 3%gain to same-store sales for December.  Its fourthquarter sales were up 10% and noted that its total retail salesincluding new stores rose by 53% in the quarter.  This store has must-have merchandise for those aged 15 to their early twenties, but you will see some olderinterlopers in the stores.  This is also one we noted in our "UNDER $10" newsletter after it temporarily reached a credit pact accord. The same-store sales gains are not at allwhat they used to be, but sales are still higher where that is not thecase elsewhere.

Hot Topic Inc. (NASDAQ: HOTT) is not rebounding today, but this one hasbounced sharply since we covered it in our "UNDER $10" weeklynewsletter calling for it to possibly reach above the $10 level.  Theoh-so-80’s look is bringing more and more buyers, and the Twilightcrowd is probably adding it in.  Many analysts got this wrong inthinking the gains were only Halloween-related.  This one posted gainsof 4.3% in same-store sales in December.  That is less thanbefore, but again positive.

The Buckle, Inc. (NYSE: BKE) is also trading higher after the denimdestination store announced same-store sales in December rose by13.5%.  As a "denim destination" store, it sells what it refers to ason-trend apparel, accessories, and footwear catering tofashion-conscious young men and women.

We are not at all seeing any major scores across the board here.  Butat least some stores are still winning while the economy is in the tank.

Jon C. Ogg
January 8, 2009