Hot Topic Inc. shares fell 14 percent early Thursday, a day after the teen apparel retailer reported better-than-expected first quarter earnings but gave weaker guidance than Wall Street expected.

Late Wednesday, the City of Industry company reported net income of $1.2 million (3 cents per share) for the quarter ended May 2, compared with a loss of $1.4 million (-3 cents) in the same quarter last year.

Sales rose 10 percent to $175 million. Same-store sales rose 9.6 percent at its flagship Hot Topic locations as the company continued to benefit from tie-ins to the popular ?wilight?book and film franchise, but declined 1.7 percent at its Torrid stores for plus-size teens.

The quarter included 2 cents per share in costs related to the company? online music site ShockHound, the company said. The adjusted results beat expectations of analysts surveyed Thomson Reuters, who on average expected 2 cents per share profit on sales of more than $174 million.

The company forecast a second-quarter loss between 4 cents and 6 cents per share, compared with a 1 cent loss a year ago. Same-store sales are expected to slip in the mid-single-digit percentage range. Analysts had forecast 1 cent per share profit. FBR Capital Markets on Thursday downgraded shares from ?utperform?to ?arket perform.?p>Hot Topic has been able to avoid the sales declines of other apparel retailers in part due its "Twilight"-licensed apparel, and the November release of a new movie, "New Moon,?may boost fall sales, analysts said

Shares were down $1.23, or 14 percent, to $7.52 in midday trading on the Nasdaq.

For reprint and licensing requests for this article, CLICK HERE.