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)