Both teenagers and investors are losing their taste for
The mall-based retail chain, which staked its claim on alternative stylings for young rebels, said after the closing bell Wednesday that its second-quarter earnings dropped below expectations. It also lowered its earnings outlook for the rest of the year.
The company posted profits of $900,000, or 2 cents a share, for the quarter, down from the $4.5 million, or 9 cents a share, it logged in the same quarter last year. Analysts on Wall Street were expecting earnings of 3 cents a share. Its shares had traded down 11 cents, or 0.7%, to $15.81 during regular trading hours.
Based on weak sales, Hot Topic lowered its earnings guidance for the third quarter, projecting profits of 15 cents to 18 cents a share. Wall Street was forecasting 27 cents a share. Likewise, the company lowered its range for the fourth quarter below expectations, to a range from 30 cents to 38 cents a share.
During the quarter, its net sales increased 12% to $152.2 million, but the gain came from new store growth. Its same-store sales, or sales at stores open at least a year, sank 3.5% compared to the same quarter last year. At the end of the quarter, the company operated 728 stores, including 100 Torrid stores, compared to 613 stores, including 59 Torrid stores, at the end of last year's second quarter.
So far in August, Hot Topic said its same-store sales are down 8% from the same month last year.