(Filed Under Financial and General Interest News). Hot Topic, Inc. reported a net loss of $7.7 million, or 17 cents a diluted share, down from a net loss of $1.8 million, or 4 cents, for the comparable period in 2010. Included in these results are $12.4 million of expenses, or 17 cents a share, for the implementation of charges for strategic business changes and a cost-reduction plan.
Sales for the retailer decreased 0.8 percent to $161.3 million down from $162.6 million while comparable store sales rose 0.2 for the first quarter. Gross margin dropped from 33.5 percent one year ago to 31.3 percent. Same-store sales were down 12.5 percent.
Hot Topic, Inc. operated 642 Hot Topic stores and 151 Torrid stores at the end of this first quarter, versus 681 and 156 stores last year at this time, respectively.
The company said it expects a loss for the second quarter in the range of 9 to 11 cents a share, excluding $3 million in costs for strategic business changes. Last year’s second quarter loss was 14 cents a share.
The company, which sells music and pop culture-inspired apparel, accessories and gifts to teenagers and young adults, recently hired a consulting firm to review its business model. Hot Topic has changed its logo, expanded merchandise in an effort to reach a broader customer base and shut down its underperforming music website ShockHound.com.
Lisa Harper, the former Chief Executive Officer of Gymboree Corp., succeeded Betsy McLaughlin as C.E.O. of Hot Topic in March 2011.
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