NEW YORK — Hot Topic’s cool sales prompted the trendy teen retailer to lower its sales and earnings expectations for the rest of the year.

Citing problems incorporating preppy styles into its women’s and men’s fashions, the City of Industry, Calif.-based company anticipated that same-store sales for July will drop 6 to 8 percent compared with the same period in 2003.

Hot Topic expects second quarter sales to be about $136 million, with net income for the quarter around 10 cents per diluted share.

The company also expects comparable-store sales for the third and fourth quarters of 2004 to either remain flat or decrease by as much as 3 percent. Net income for the third and fourth quarters is expected to range from 30 to 33 cents per share and 49 to 52 cents per share, respectively.

Company officials said while their music-related categories and plus-size Torrid concept are exceeding expectations, their major clothing classifications haven’t shown improvement.

“We continue to experience difficulty translating the current ‘clean and preppy’ fashion trends to styles that appeal to our core customer base,” said chief executive officer Betsy McLaughlin in a statement.

Same-store sales have been disappointing for the mall-based retailer. Through July 14, month-to-date same store sales dropped 4 percent, while comps fell 0.4 percent for the month of June.

— Carrie Melago

This story first appeared in the July 16, 2004 issue of WWD. Subscribe Today.