Cool September at Hot Topic, Aeropostale, Limited Brands

Both report positive same-store sales growth but at a pace well below last year's.
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Updated from 4:51 p.m. EDT

Aeropostale

(ARO)

and

Hot Topic

(HOTT)

reported sharply decelerating September sales growth Wednesday.

Aeropostale reported sales of $90.6 million for the month, compared to $76.6 million in September 2003. Same-store sales, or sales at stores that have been open for at least one year, added 1.9%, after last year's increase of 22%.

Analysts on Wall Street expected a same-store sales gain of about 5%. Despite the miss, the stock was up 64 cents, or 2.3%, to $28 in after-hours trading, after adding 2.1% during regular trading hours.

Meanwhile, Hot Topic posted September sales of $57.9 million, up from last year's $48.9 million. Its same-store sales grew 1.1%, down from 9% last year. Analysts were expecting a decline of about 3%. The stock was up $1.19, or 6.8%, to $18.60 in after-hours trading, after dipping 0.3% during Wednesday's session.

Hot Topic also said it repurchased a million shares in September, at an average cost of $16.85.

Aeropostale's chairman and chief executive, Julian R. Geiger, expressed enthusiasm in a press release about the results, blaming declining comps on the tough comparison to last year when consumer spending was stronger thanks in part to federal tax relief.

"During the month, we intentionally managed our business on leaner inventory levels despite a difficult comparison to the prior year," Geiger said in the statement. "Accordingly, we are pleased that we generated positive comps for the period, while being less promotional and finishing the month with gross margins ahead of last year."

The two mall-based chains began the cascade of September sales reports that continues Thursday from the retail sector.

Limited Brands

(LTD)

, which owns mall-based chains like Victoria's Secret, Bath & Body Works, and Limited Stores, said September sales totaled $679.3 million, down from $714.4 million last year. Same-store sales dropped 5%, after Wall Street had expected a gain of about 4%.

Limited also said it authorized the repurchase of $2 billion of its common stock and a post-repurchase special dividend of $500 million. Its stock gained 31 cents, or 1.4%, to $21.88 on the day.

American Eagle Outfitters

(AEOS)

said its sales rose 32.2% to $161.5 million. Its same-store sales surged 23.3%, beating estimates.

In light of September's results, American Eagles raised its third-quarter earnings guidance to between 67 cents to 69 cents per share from a previous forecast of 56 to 58 cents.