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Hot Topic, Inc. (HOTT) Shares Decline on Second Quarter Loss and Outlook for the Third Quarter

Hot Topic (NASDAQ: HOTT), a mall-based chain of retail stores that specializes in hardcore stuff for the rebellious teenager such as rock music T-shirts and retro apparel, and accessories and gifts, recently reported its financial results for second quarter ending June 28, 2008. Shares of Hot Topic declined earlier this week due to the announcement of a slight loss in the second quarter and disappointing second-half guidance.

For the second quarter of 2008, the company reported a net loss of $0.4 million, or $0.01 per share, compared with a net loss of $1.7 million, or $0.04 per share, during the second quarter of fiscal 2007. The chief executive officer of Hot Topic, Betsy McLaughlin, recently stated, “This was our best quarterly top sales performance in 13 quarters. Transactions per store increased 2 percent. Music and fashion accessories were the leaders as we continue to employ strategies necessary to recapture market share in our stores.”

Regarding future growth, management continues to be focused on controlling expenses, maximizing inventory investments and being prudent with the use of capital. The company also issued third quarter earnings per share guidance of $0.12 to $0.15 per diluted share and estimated fourth quarter earnings in the range of $0.25 to $0.28 per diluted share based upon a comparable store sales decline of low-single digits.

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