NEW YORK (AP) — Shares of teen retailers got a boost Thursday, after Hot Topic Inc. reported a 38 percent jump in third-quarter net income, helped by better merchandising and a new selection of fashions that drew in shoppers.
Like other teen retailers, Hot Topic has struggled to boost profitability in the still-unbalanced economy. The company has closed unprofitable stores, changed its product lineup and shuttered its music download and social networking website. But in recent quarters, its profitability has improved and sales have risen.
The City of Industry, Calif.-based company said after Wednesday's market close that customers responded well during the recent quarter to the fashions at its Torrid stores, while changes to the way it gets its merchandise also boosted profitability at that brand. Meanwhile, the Hot Topic stores experienced better demand for fashion apparel and t-shirts, the company said.
Hot Topic's earnings of 10 cents per share beat Wall Street predictions by a penny, although its $179.4 million in revenue fell slightly short of average analysts' expectations of $182.9 million.
Not surprisingly, Hot Topic posted some of the sector's biggest gains on Thursday. Its shares rose 59 cents, or 7 percent, to $9.15 in heavy afternoon trading, after peaking at $9.25 earlier.
The release of Hot Topic's improved results came after Abercrombie & Fitch Co. earlier on Wednesday announced a better-than-expected third-quarter profit and raised its earnings prediction for the full year. On Thursday, that company's shares fell 8 cents to $41.83, after gaining 34 percent the day before.
Other teen retailers posted mixed results Thursday, as the overall market tumbled. Here's how some of their shares were doing in afternoon trading:
— Buckle Inc., up 16 cents to $47.90, after initially jumping to $48.40.
— Zumiez Inc., up 7 cents to $19.95, after reaching $20.12 earlier in the day.
— Urban Outfitters Inc., down $1.22, or 3 percent, to $34.99, after jumping as high as $36.27.
— The Wet Seal Inc. down 1 cent to $2.89, after reaching $2.91.
— Aeropostale Inc., down 20 cents, or 2 percent, to $13.15, after rising to $13.39.