Mall-based retailer Hot Topic Inc. lowered its guidance Wednesday after reporting a second-quarter loss, due in part to expenses related to an online music project.
This story first appeared in the August 21, 2008 issue of WWD. Subscribe Today.
For the period ended Aug. 2, the company posted a net loss of $450,000, or 1 cent a share, compared with a net loss of $1.7 million, or 4 cents, for the same year-ago period. According to Hot Topic, the second quarter included approximately 1 cent a share of expense related to the company’s online music initiative. Sales grew 3.2 percent to $166.8 million, versus $161.7 million for the year-ago quarter. The company said same-store sales declined 0.9 percent for the three months.
For the six months, the California-based retailer posted a $1.9 million loss, or 4 cents a share, compared with a loss of $2.5 million, or 6 cents, in the same half a year ago. Sales increased 2.1 percent to $325.8 million from $319 million.
Projecting a comparable-store sales decline in the low-single digits, Hot Topic forecasted third-quarter guidance of earnings per diluted share in the range of 12 to 15 cents. The company also said it expected fourth-quarter EPS to be in the 25 to 28 cents range. Included in the guidance for both quarters was the expense related to the launch of an online music site.
Analysts polled by Yahoo Finance predict the company will report earnings of 16 cents a share in the third quarter, and 37 cents in the fourth.
Hot Topic operates 158 Torrid stores in addition to 684 Hot Topic units.