Retailer Hot Topic slips in trading, as revenue declines and misses expectations

By AP
Thursday, November 19, 2009

Hot Topic declines as sales slip, miss estimates

CITY OF INDUSTRY, Calif. — Shares of teen-oriented Hot Topic Inc. fell Thursday after it reported that its third-quarter revenue declined and it missed Wall Street expectations during the weak economy.

The stock declined 88 cents, or 13.2 percent, to $5.79.

For the three months that ended Oct. 31, the company that operates Hot Topic and Torrid stores said Wednesday that it earned $5.8 million, or 13 cents per share, compared with $7.4 million, or 17 cents per share, a year earlier.

Results for the third quarter of fiscal 2009 and fiscal 2008 include 2 cents and 1 cent per share of expenses, respectively, for ShockHound — the company’s online music site.

The company’s revenue declined 4 percent to $189.6 million from $197.3 million as consumer spending remained soft.

Analysts surveyed by Thomson Reuters expected earnings of 13 cents per share and $190.3 million. Those estimates typically exclude one-time items.

Sales in stores open at least a year, an important retail industry metric, declined 5 percent.

The company said it expects fourth-quarter earnings between 23 cents per share and 26 cents per share. Analysts predict earnings of 25 cents per share.

BMO Capital Markets analyst John Morris said the company faces “an uphill battle” in honing its focus and connecting with its core customers.

Morris rates the stock “Market Perform.”

YOUR VIEW POINT
NAME : (REQUIRED)
MAIL : (REQUIRED)
will not be displayed
WEBSITE : (OPTIONAL)
YOUR
COMMENT :