Hot Topic losing money due to loss of Twilight sales, hopes to be back up with New Moon

Hot Topic, who had seen a fairly impressive windfall profit margin as a result of its marketing of Twilight-related goods, is seeing a downward turn in its quarterly estimates.

Says Reuters,

Analyst Brian Sozzi of Wall Street Strategies Inc. . . . said Hot Topic looks to be using the seasonally slow second quarter to clear excess inventory ahead of the back-to-school season.

"I think what you may have seen in the (second-quarter) estimates is the belief that Twilight product would help smooth out the results," he said.

Sales of merchandise related to the hit movie "Twilight" had boosted business at Hot Topic for months, but the company saw a fall in comparable sales in April, when demand for the movie-related merchandise waned a bit.

The news, however, is not all foggy for Hot Topic. Continues the piece,

The retailer now projects comparable sales to fall in the mid-single-digit percentage range for the second quarter, while month-to-date comparable sales in May have slipped 6 percent, she added.

But the company plans to get new merchandise for the back-to-school season, as well as newer Twilight-related product when the movie sequel arrives in the fall.

"I am planning for Q3 to be a winner for Hot Topic. It should capture the bulk of back-to-school sales in August and September, analyst Sozzi, who has a "buy" rating on the company, said."

While it may not be surprising that Hot Topic is experiencing a bit of a profit spiral downward as a result of Twilight's passage, it is a little disorienting to see just how much. Also, the fact that the company is, it seems, reliant on The Twilight Saga: New Moon to boost its third quarter sales is quite fascinating.

This article only goes to show the massive effect that Twilight has, indeed, had upon this country (and perhaps the planet). Hot Topic has been in business for over twenty years, and has been a member of the Fortune 500 since 2006, yet the impact that its Twilight-related sales has had on the company is going unnoticed by noone.

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