Wednesday, Hot Topic, Inc. (HOTT), a mall and web based specialty retailer reported a decline in profit for the fourth quarter due to a decline in sales. Also, the company said that it expects a loss per share for the first quarter of 2010 due to a further decline in comparable store sales.
According to the company, the net income for the quarter declined to $8.0 million or $0.18 per share from $14.2 million or $0.32 per share in the year-ago quarter.
On average, twelve analysts polled by Thomson Reuters expected the company to earn $0.18 per share. Analysts' estimates typically exclude special items.
Net sales for the quarter declined to $214.22 million from $237.97 million in the year-ago quarter. Ten Wall Street analysts estimated a revenue of $214.64 million.
Division-wise, net sales from Hot Topic declined by 12.4% year-over-year to $174.2 million and net sales from Torrid declined by 1.7% year-over-year to $40.0 million.
At the end of the fourth quarter, the company operated 680 Hot Topic stores and 156 Torrid stores, compared with 681 Hot Topic stores and 159 Torrid stores at the end of the fourth quarter of fiscal 2008. During the fourth quarter, the company opened one Hot Topic and closed one Hot Topic store.
Also, the company remodeled two Hot Topic stores during the quarter, bringing the total number of remodeled or relocated stores during fiscal 2009 to 16.
During the fourth quarter the cost of goods sold, including buying, distribution and occupancy costs declined to $137.64 million from $146.04 million, and selling, general and administrative expenses declined to $63.38 million from $69.02 million a year-ago.
The company issued first quarter guidance for the 13 weeks ending May 1, 2010 and projected a loss per share in the range of $0.02 to $0.05. Eleven Wall Street analysts estimate a loss of $0.02 per share for the quarter. The company said that this guidance is based upon a comparable store sales decline in the high-single-digit percentage range.
For the fiscal year 2009, the company reported that the net income declined to $11.9 million or $0.27 per share from $19.7 million or $0.45 per share in the previous year.
Thirteen Wall Street analysts estimated earnings of $0.27 per share.
Net sales for the full year declined to $736.71 million from $761.07 million in the previous year. Eleven Wall Street analysts estimated a revenue of $737.00 million for the full year.
On March 3, market rival Urban Outfitters Inc. reported a 92% surge in fourth-quarter profit, helped by strong sales and significant improvements in initial merchandise margins. Urban Outfitters, which operates under the Anthropologie, Free People, Leifsdottir, Terrain and Urban Outfitters brands said that the company's fourth-quarter net income was $77.68 million or $0.45 per share, compared with $40.55 million or $0.24 per share in the same quarter last year.
HOTT closed Wednesday's last trade at $6.55, up $0.02 or 0.31%, on a volume of 1.49 million shares on the Nasdaq. In the after hours the stock traded down 4.58%.
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