Hot Topic Mauled By Vampires

Hot Topic shares plunge after it swings to a first-quarter loss, hurt by the absence of 'Twilight' merchandise.
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NEW YORK (

TheStreet

) --

Hot Topic

(HOTT)

is spilling blood.

The company reported after the close Wednesday that it had swung to a loss in its first-quarter, due in large part to the absence of merchandise from the vampire series

Twilight

. Hot Topic chose not to carry the second film in its stores.

Shares of the teen retailer were plunging 12.3% to $5.73 during Thursday's regular session.

Hot Topic said it lost $1.8 million, or 4 cents a share, compared with a profit of $1.2 million, or 3 cents, in the year-ago period.

Sales at Hot Topic dropped 7% to $162.6 million, missing analysts' estimates of $163.3 million. Comparable sales sank 12.3%.

Hot Topic April Sales: Analysts Blew It

Excluding last year's Twilight products, however, Hot Topic said its same-store sales would have dropped just 4%.

The declines all came from the company's namesake stores. Torrid, its plus-size business, actually saw sales jump 7% to $42.9 million.

"While

Twilight

was a great license for Hot Topic last year, as seen by first-quarter results, there can be a downside to such a powerful property," Roth Capital Partners analyst Elizabeth Pierce wrote in a note. "Although the comparisons from

Twilight

become less challenging in the second quarter and although

Eclipse

, the third piece of the

Twilight

saga, will be out in June, we believe its contribution will be minimal."

Looking ahead, Hot Topic predicts a second-quarter loss between 7 cents and 10 cents a share. Analysts are calling for a loss of 7 cents.

While Hot Topic is in the process of beefing up its accessories business, Pierce said it will take until the end of the second quarter to see any form of improvement in that segment.

--Reported by Jeanine Poggi in New York.

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