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Saturday, Feb 24, 2024

Hot Topic’s Loss Widens

Hot Topic Inc. said its second-quarter loss significantly widened as sales of its trendy teen clothing continued to drop due to the recession.

After the Wednesday market close, the City of Industry-based fashion chain reported a loss of $3.2 million (-7 cents per share) for the quarter ended Aug. 1, compared with a loss of $450,000 (-1 cent) a year ago. Revenue fell 5 percent to less than $158 million. Same-store sales fell 7.7 percent.

The results included a 2-cent-per-share charge related to the company’s online music site, ShockHound.com. The losses were less than expected for analysts surveyed by Thomson Reuters, who on average forecast the clothing chain to lose 8 cents share. However, they expected revenue of more than $158 million.

The company expects third quarter sales at stores open at least a year to continue falling despite the back-to-school shopping season. Analysts expected this fall’s “Twilight” sequel, “New Moon,” to boost sales of the film’s licensed apparel, but not as much as the first movie.

Hot Topic operates 835 mall stores under its Hot Topic and Torrid brands, the latter aimed at plus-sized women.

Shares rose 4 cents, or less than 1 percent, to $7.46 in midday trading on the Nasdaq.

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