Teen apparel retailer Hot Topic Inc. (HOTT), Wednesday reported an increase in profit for the fourth quarter, largely due to a double-digit revenue growth and improved same-store sales.
Hot Topic said sales for the fourth quarter grew 11 percent to $232.96 million from $209.89 million last year. Analysts polled by Thomson Reuters estimated revenues of $227.92 million for the quarter.
Hot Topic's same store sales, or sales in stores open at least a year, rose 2.6 percent in the quarter.
During the fourth quarter, the company opened five Torrid stores and five Blackheart stores, and closed two Hot Topic stores and one Torrid store. At the end of the quarter, the company operated 618 Hot Topic stores, 190 Torrid stores and five Blackheart stores. Torrid sells plus-size clothes for teens and young women.
California-based Hot Topic's fourth-quarter profit improved to $12.11 million or $0.29 per share from $8.96 million or $0.21 per share last year. Analysts expected earnings of $0.27 per share for the quarter.
Last Thursday, Hot Topic agreed to be acquired by private equity firm Sycamore Partners for $600 million in cash. The deal requires approval from shareholders, which will be sought at a special meeting of shareholders.
Under the terms of the deal, Sycamore will offer $14.00 per share in cash for all the shares of Hot Topic, representing a 30 percent premium to Hot Topic's closing stock price on March 6.
HOTT closed Wednesday's trading at $13.85, up $0.01 or 0.07%, on a volume of 3.5 million shares, on the Nasdaq. The stock further gained $0.06 or 0.43% in after hours trade.
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