Hot Topic Chills Growth Plans

The retailer posts a drop in earnings and lowers the number of stores it plans to open this year.
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Hot Topic

(HOTT)

, continuing to cool down amid a sales slump, reported a drop in fourth-quarter earnings and scaled back its expansion plans for the coming year.

The seller of alternative teen stylings posted earnings of $10.6 million, or 23 cents a share, for the quarter ended Jan. 28, compared with earnings of $17.4 million, or 38 cents a share, a year earlier. The results included an asset impairment charge of $1.6 million, or 2 cents a share, and a charge of $3.1 million, or 4 cents a share, related to the nonredemption of gift cards.

Hot Topic's own guidance had called for earnings of 21 cents to 24 cents a share. Analysts polled by Thomson First Call expected earnings of 23 cents a share.

The company's sales for the holiday quarter rose to $230.4 million from $211.3 million a year earlier. Same-store sales, however, dropped 3.8%.

Hot Topic said it now plans to open about 50 stores in the current year, consisting of 40 new stores from its namesake chain and 10 new Torrid stores. The company previously targeted opening 60 Hot Topics and 25 new Torrids. The company currently operates 662 Hot Topic stores and 120 Torrid stores.

The company's shares recently sank 52 cents, or 3.6%, to $13.96 after hours.