The company said it estimates the charges, along with severance costs related to recent changes in management, will result in a total charge of 21 cents a share, to be recorded primarily in the fiscal first quarter.
The charges come as Hot Topic has reported weaker sales in recent quarters, a trend that prompted the company to announce a cost-reduction plan in November. The mall- and Web-based retailer, which offers pop culture-related clothing and accessories, has struggled to win shoppers after its merchandise geared to the "Twilight" vampire movie sequels failed to buoy results as much as products tied to the original film did.
Just last week, Hot Topic announced the resignation of its longtime Chief Executive Betsy McLaughlin and, on Monday, the company said Amy Kocourek, chief merchandising officer of the namesake division, has left. New CEO Lisa Harper, a board member, will assume direct oversight of Hot Topic merchandising, the company said.
Hot Topic also projected it would report a loss of 1 cent to 4 cents a share, excluding the charges, for the fiscal first quarter ended April 30, a view that was based on a low-single-digit percentage decline in same-store sales. Analysts polled by Thomson Reuters expected a loss of 3 cents a share.
For the year, Hot Topic sees earnings of 5 cents to 15 cents a share, based on flat to a low-single-digit percentage drop in same-store sales. Wall Street most recently forecast a profit of 14 cents a share.
Hot Topic also joined a number of its teen-retailing peers by saying it would discontinue the issuance of monthly sales reports, effective in the fiscal third quarter. The company will instead report quarterly sales results on the first Wednesday following the close of each fiscal quarter.
Abercrombie & Fitch Co., Aeropostale Inc. and American Eagle Outfitters Inc. all stopped reporting monthly sales earlier this year.
Shares of Hot Topic were halted ahead of the news. The stock closed up 9 cents to $5.95 on Monday.
