Hot Topic, PacSun Report Quarterly Losses
Hot Topic Inc. reported on Aug. 19 a loss of $3.2 million, or $0.07 per share, for its second fiscal quarter. The good news was that the loss came in the high end of its guidance for its second-quarter performance, which was a loss of $0.07 to $0.09 per share.
The City of Industry, Calif.–based retailer forecast the comparable sales for its third fiscal quarter would show a decline in the mid-single digits. The quarter ends on Halloween, Oct. 31, a date that marks the end of one of the most important shopping seasons for the Goth and rock ’n’ roll–fashion mall-based chain. Hot Topic maintains a fleet of 684 Hot Topic stores and 158 Torrid stores.
Many retail analysts are highly anticipating the fourth quarter for Hot Topic, thanks to the Nov. 20 release of cult movie “New Moon,” the second in the “Twilight” teen vampire series. Hot Topic was the go-to store to buy apparel and accessories for “Twilight” in 2008, when booming sales for “Twilight” merchandise put Hot Topic’s sales in the black after four years of losing money.
However, bustling “New Moon” sales are not a sure thing, said analyst Jeffrey Van Sinderen of B. Riley & Co. “It will be more competitive.” More retailers will be keen to take part in the business of selling “New Moon” merchandise. However, Hot Topic might be the masters of the game of selling this film series’ merchandise, Van Sinderen said. “They’ve learned a lot about the ’Twilight’ series business,” he said. “They’ll handle it better.”
On Aug. 20, Pacific Sunwear reported results for its second quarter of fiscal year 2009. Same-store sales dropped 24 percent during the quarter. The retail chain’s net sales dropped to $243 million, compared with net sales of $313 million for the second quarter of 2008.
PacSun President Gary Schoenfeld pledged his store would regain its position of being one of the top stores for people aged 15 to 20 years old. “Clearly we have a lot of work to do to stem our decline in sales and ultimately return to profitability,” he said.
For its third quarter, PacSun forecast same-store declines ranging from the mid-teens to low twenties percentage.—Andrew Asch
