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Hot Topic News Detail
Hot Topic 4th-qtr profit up; sales down
Apr 08, 2008 06:46:34

Hot Topic Inc, the teen clothing retailer, said on Wednesday fourth-quarter profit rose on lower expenses, topping Wall Street estimates, even as sales fell.

Hot Topic, which sells rock n' roll-inspired apparel and accessories as well as music, said quarterly net profit increased to $11.9 million, or 27 cents per share, from $8.9 million, or 20 cents per share, a year earlier.

Analysts, on average, expected earnings of 26 cents, according to Reuters Estimates.

The company, which also operates the Torrid plus-size chain for young women, said total sales fell 8 percent to $220.7 million, while same-store sales, a key gauge of retail performance, dropped 6.3 percent.

Men's apparel and accessories were weak in the quarter, while same-store sales at its women's business were flat.

Hot Topic has been upgrading stores and merchandise in a bid to reverse a lingering slump. Moreover, the company has avoided excessive markdowns that hurt profit margins, and scaled back on promotional activity during nonpeak traffic periods.

"Despite the temptation to drive short-term comps with incremental promotions during this past quarter, we remained committed to our strategy," said Chief Executive Betsy McLaughlin in a conference call with analysts.

As part of its strategy to reinvigorate music sales, Hot Topic will launch a new Web site - www.shockhound.com - featuring free music and original content. The company is trying to be less dependent on large bands and new releases and focus on emerging artists.

LOS ANGELES, March 12 (Reuters)

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