Hot Topic Inc. (NASDAQ:HOTT), a shopping mall-based specialty retailer operating the Hot Topic and Torrid store concepts across the U.S. as well as the e-space music discovery concept ShockHound, reported a 7.5% decrease in March 2010 same-store sales, compared to a 7.1% increase in the year-ago period.
Total net sales during the month decreased 6.6% to $65.9 million compared to the year-earlier period. Net sales in the Hot Topic segment fell 11.0% year over year, and increased 9.0% in the Torrid segment during the month.
Comp sales decreased 11.2% in the Hot Topic segment during the month compared to the year-earlier period. Hot Topic’s namesake stores sell a selection of music/pop culture-licensed and music/pop culture-influenced apparel, accessories, music and gift items, primarily targeted toward ages of 12 to 22.
Comp sales increased 7.5% in the Torrid segment for the five-week period ended April 3, 2010, compared to the year-earlier period. The company’s Torrid stores sell apparel, lingerie, shoes and accessories for plus-size women.
Same-store sales of Hot Topic have continually suffered due to the prolonged recession, which has squeezed disposable incomes, compelling customers to reduce discretionary spending such as that on fashionable apparel and accessories. However, we maintain our long-term Neutral recommendation on the company as we anticipate it to perform in line with the broader market.