Hot Topic Inc. (NASDAQ: HOTT) reported better than expected same store sales last night, down only 4% versus a consensus decline of 6.7%.

The company, which sells alternative music and pop culture apparel and merchandise to teens, has cut back on promotional activity with inventories becoming more lean, a positive for future quarter performance. Further, its new story formats continue to do well and trends at Torrid remain solid.

We blogged earlier in the week that Hot Topic may be setting the foundation for a meaningful turnaround later this year and going into 2008. The stock is way off from its $30 high and is now at $11. SAC Capital has accumulated 5.1% of Hot Topic stock, or 2.3 million shares, up from the 245K shares it had disclosed at the end of the first quarter.

Hot Topic, with movies like the Transformers and a new generation of video game consoles and games coming to market, will have ample supply of trendy new products to sell and support a nice turnaround. The stock is up 49 cents in trading today.

Hot Topic Inc (NASDAQ: HOTT), the specialty retailer that operates the Hot Topic and Torrid concepts, might be worth a look. The stock is way off from its $30 high and is now selling for $11, and its poor operating performance could be bottoming.

While same-store sales continued to slide in May, down 6.1%, margins for the retailer are beginning to improve. Also, SAC Capital has racked up 5.1% of Hot Topic stock, or 2.3 million shares up from the 245K shares it had disclosed at the end of the first quarter.

With bad inventory out the door and movies like the Transformers and a whole new generation of video game consoles and games coming to market, this trendy retailer stock could be ready for a nice turnaround.

Monday July 9

• The Chicago Board of Trade (NYSE: BOT) and Chicago Mercantile Exchange Holdings Inc (NYSE: CME) to hold a special shareholder meeting in Chicago about merging at 4pm.
• Take-Two Interactive Software (NASDAQ: TTWO) to hold a business update at 4:30pm.
• Alcoa Inc (NYSE: AA) to report Q2 earnings; conference call at 5pm.

Tuesday July 10

• Electronic Entertainment Expo, or E3, to be held from July 10-July 13 in Santa Monica, California.
• The Home Depot Inc (NYSE: HD) to release a 2007 Sales Update at 9am.
• Sealy Corporation (NYSE: ZZ) to report Q2 earnings; conference call at 5pm.

Welcome to the 17th installment of The Wal-Mart Weekly, a weekly column dedicated to bringing you insight, wit, facts, results, opinions and just a bit of everything else when it comes down to a very hot topic these days: Wal-Mart.

Last week I mused on how Wal-Mart Stores (NYSE: WMT) supplies basic customer service to its customers -- or a lack of it. From waiting in lines when there are many empty checkout lanes to blocking aisles with pallets during daytime shopping hours, is the retailer turning off customers by not creating a pleasant atmosphere that is conducive to shopping?

This week, we'll be making the rounds on how the various Wal-Mart departments combine into a cohesive shopping experience, but do not threaten some competitors at all. Why? Well, have you ever thought that Wal-Mart would be seen as lacking in product selection? It does, from this corner, and I'll give you insight on why Wal-Mart will never be able to unseat some retailers at the same time it continues to grow its sales. Read on.

Will players in the specialty retail field bring up solid March sales results this week? Who knows, but analysts expect this and, you know, analysts are always right (well, not exactly). At issue here is the expected strength of March sales in the specialty retail sector, reflecting a sales shift from April due to an earlier Easter. Who may suffer here? Specialty retailers of clothing, that's who.

OK, so what does that mean for April sales and beyond? A sour entry into late spring, perhaps? Who's in the cross-hairs of analysts in this sector? Try retailers like Talbot's (NYSE: TLB), Chico's FAS (NYSE: CHS), and Limited Brands (NYSE: LTD). Throw on that pile companies like Abercrombie & Fitch (NYSE: ANF), which may have seen lower sales due to bottoms (yeah, the "pants" kind) during this season shift that's happened in the last few weeks.

And the good news? While retailers like Pacific Sunwear (NASDAQ: PSUN), Hot Topic (NASDAQ: HOTT) and American Eagle Outfitters (NYSE: AEO) may have an above-average spring, sales are expected to slump over the summer season. Adjust positions accordingly I guess? Heh -- seasonality is the name of the game in clothing and much of specialty retail. The companies that can predict and adjust product lines as fast as possible are the winners.

Disclosure: I own HOTT shares as of 4-11-07.

Monday March 12

• Texas Instruments Incorporated (NYSE:TXN) mid-quarter update conference call at 5pm. Note that Stifel just upgraded Texas Instruments to Buy from Hold as they believe the mid-quarter update will show improving trends.

Tuesday March 13

• Goldman Sachs Group Inc. (NYSE:GS) to report Q4 earnings; conference call at 4:30pm.
• Qualcomm Incorporated (NASDAQ:QCOM) to hold annual shareholder meeting at 11:30am.
• PDUFA Date for GlaxoSmithKline plc ADR's (NYSE:GSK) Tykerb, a breast cancer drug.

Wednesday March 14

• Retailers Hot Topic Inc. (NASDAQ:HOTT) and Zumiez Inc (NASDAQ:ZUMZ) to report earnings. Hot Topic's Q4 conference call is at 4:30pm, Zumiez's Q4 conference call is at 5pm.
• PDUFA Date for Novartis AG ADS's (NYSE:NVS) Tekturna, a treatment for high blood pressure.

Thursday March 15

• Bayer AG ADS (NYSE:BAY) to report Q4 earnings; conference call at 6am.
• Six Flags Inc (NYSE:SIX) to report Q4 earnings; conference call at 4pm. Note that earlier this week, Cramer specified Six Flags as a stock he was bullish on during the "Lightning Round" of his Mad Money television show.

Friday March 16

• IMAX Corp (NASDAQ:IMAX) to report Q4 earnings; conference call at 8:30am.
• AnnTaylor Stores Corporation (NYSE:ANN) to report Q4 earnings; conference call at 8:30am.

Before the opening bell, Melly Alazraki touched on some of the retail sales figures and reactions and I thought it might be interesting to update the graph I posted on Monday. The chart below shows the top and bottom performing stocks from the close on Wednesday, November 22.



When we looked at this data earlier in the week, we saw that the bulk of the returns were flat to lower. With the new sales figures now rolling in, along with some earnings reports, we see some stocks are starting to emerge as winners. DSW Inc. (NYSE:DSW), Dress Barn (NASDAQ:DBRN), and Hot Topic (NASDAQ:HOTT) are currently showing gains of at least five percent from where they stood ahead of Black Friday. DSW, the strongest stock on my list, reported better-than-expected earnings of 36 cents per share last night. The shares gapped higher on the open to tag a new high.

The bottom of the graph shows that Christopher & Banks Corp (NYSE:CBK), Bebe Stores (NASDAQ:BEBE), and Coldwater Creek (NASDAQ:CWTR) appear to be struggling through this holiday season.

When you look past the specialty stocks above, it seems that there is still an overall downside bias in the mainstay retail area. Well known names such as Amazon (NASDAQ:AMZN), Federated Department Stores (NYSE:FD), Sears Holding (NASDAQ:SHLD), Wal-Mart (NYSE:WMT), Best Buy (NYSE:BBY), The Gap (NYSE:GPS), Target (NYSE:TGT), and Home Depot (NYSE:HD) are still trading below their pre-Black-Friday levels.

Nick Perry is an analyst with Schaeffer's Investment Research.

Futures are positive in early morning trade, indicating a similar for stocks.

This morning, investors will be looking mostly at retail sales figures, which is especially important in light of the holiday shopping season, as well as some economic data.

At 8:30 this morning, weekly initial claims is due, but also October personal income and consumer spending, both expected to grow at a similar rate as last month, 0.5% and 0.1% respectively. This report could be interesting especially in light of latest comments that shifted worries somewhat from inflation to growth. Consumer spending and income can give an indication of future growth, while personal consumption expenditures is another measure of inflation. At 10, the Chicago PMI index, an index that gauges factory health in the upper Midwest is due.

According to early reports, Wal-Mart Stores, Inc. (NYSE:WMT), being the largest retailer in the U.S. dampened November sales as it already announced over the weekend that it expects November same store sales have slipped by 0.1%. With Wal-Mart, same-store sales in November probably rose 2.7%, below the 3.7% growth last year. Excluding Wal-Mart same-store sales probably rose 4.8% in November, compared to 3.3% last year.

Reporting sales this morning:

• Costco Wholesale (NASDAQ:COST) November same-store sales were up by 5%, while total sales rose 9% to $4.84 billion. Analysts consensus estimate of November same-store sales was 5.7%.
• Target Corp. (NYSE:TGT) is expected to post 5.7% growth in same-store sales, American Eagle (NASDAQ:AEOS) already reported a 14% same store gain, below the consensus estimate of 14.7%.
• Hot Topic Inc. (NASDAQ:HOTT) shares are up more than 10% in pre-market trading after it reported yesterday a smaller same store sales decline of 4.3% compared with 6.8% that analysts had expected.
• Pier 1 Imports, Inc. (NYSE:PIR) reported a November same store sales drop of 15.3%, a bigger decline than analysts expectation of a 13.6% same-store sales drop.

Meanwhile, in Europe, the European Commission is more optimistic about economic growth of the dozen euro nations and said they will start 2007 stronger than the commission had anticipated a month ago, strengthening the case for higher interest rates.