Hot Topic Meets Cooled Views

Earnings drop 16% for the fourth quarter.
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Struggling retailer

Hot Topic

(HOTT)

posted a 16% drop in fourth-quarter earnings as same-store sales stumbled.

The company, a seller of music-based clothing and accessories, said Wednesday that its fourth-quarter profit fell to $8.9 million, or 20 cents a share, from $10.6 million, or 23 cents a share, a year earlier. The most recent quarter included an asset impairment charge of $2.8 million, or 4 cents a share.

The results were in line with the company's projection for earnings of 20 cents to 21 cents a share, including the charge. Hot Topic had lowered its profit forecast in January from a prior range of 33 cents to 38 cents after disappointing holiday sales.

Hot Topic's sales for the quarter increased 4% to $240.5 million. Same-store sales, or sales at stores open at least a year, slid 5.3%.

Analysts polled by Thomson Financial had an average estimate for earnings of 21 cents a share on $239 million in revenue.

During a conference call with analysts, Hot Topic forecast a first-quarter loss of 1 cent to 4 cents a share. Wall Street is expecting a loss of a penny a share.

Shares were climbing 7 cents to $10.96 in after-hours trading.