CITY of INDUSTRY, Calif., Jan. 3, 2007 (PRIME NEWSWIRE) -- Hot Topic, Inc. (Nasdaq:HOTT) today announced the following sales results for its fiscal month of December (five weeks ended December 30, 2006):
Net Sales Comparable Store
Sales % Change
------------------- ----------------------
$ % Change This Last
Millions to Last Year Year
Year
--------- --------- --------- ---------
December $131.0 -1% -5.1% -6.2%
Quarter-to-date $186.5 -1% -4.9% -4.5%
Year-to-date $697.6 2% -6.6% -3.6%
The company announced that as a result of the lower than expected December sales performance, it now estimates net income for the fourth quarter of 2006 will be in the range of approximately $0.20 to $0.22 per diluted share versus previous guidance of $0.33 to $0.38 per diluted share.
Betsy McLaughlin, Chief Executive Officer, said, "We are very disappointed by our consolidated December results and their implications for the quarter. As a result of lower than expected sales at the Hot Topic division, particularly during the first half of the month, promotional activity was increased relative to our plans. Although sales in our licensed and fashion novelty tee classifications for both mens and womens established solid positive trends, many of the music and fashion categories performed worse than anticipated. As a result, we are revising our earnings expectations for the fourth quarter to begin 2007 in a clean inventory position. The revised guidance reflects a comparable store sales decline in the mid single digit range for the quarter and increased markdowns to aggressively address the resulting inventory risk. We expect inventories at the end of the fourth quarter to be roughly flat to last year on a per square foot basis."
For more detailed information relating to the above matters, please call 626-709-1209 to listen to a recorded commentary.
Hot Topic, Inc. is a national mall-based specialty retailer. Hot Topic offers apparel, accessories and gifts to young men and women principally between the ages of 12 and 22. Torrid, the company's second concept, provides plus-size fashion-forward apparel and accessories that target young women principally between the ages of 15 and 29. As of December 30, 2006 the company operated 695 Hot Topic stores in all 50 states and Puerto Rico, 131 Torrid stores, and Internet stores www.hottopic.com and www.torrid.com.
In addition to historical information, this news release and the aforementioned prerecorded commentary contain forward-looking statements, which include statements relating to financial results, guidance, projections and other financial performance and managing growth. These statements involve risks and uncertainties, including risks and uncertainties associated with meeting expected financial results, management of growth, relationships with mall developers and operators, the risk that available cash or mall space will not be adequate for planned expansion, fluctuations in sales and comparable store sales results, risks and uncertainties with respect to new store openings including risks associated with the company's new store concepts and Internet stores, music and fashion trends, competition from other retailers, uncertainties generally associated with specialty retailing, the effect of economic conditions, the effect of severe weather or natural disasters, political and/or social changes or events that could negatively impact shopping patterns and/or mall traffic, litigation proceedings and contingent liabilities, as well as other risks detailed in the company's SEC reports including its Quarterly Reports on Form 10-Q and its Annual Report on Form 10-K for the year ended January 28, 2006. Historical results achieved are not necessarily indicative of the future prospects of the company, and actual results or circumstances could differ materially from the forward-looking statements.