Twilight Shines On Hot Topic

The popular vampire book turned movie, Twilight, brought in $70 million in its opening weekend and teenaged girls aren’t the only ones applauding the film.

Shareholders of Hot Topic (Ticker: HOTT) are becoming fans fast. The retailer, which owns exclusive licensing rights to produce Twilight apparel, saw its stock rise 27 percent on Monday.

I saw some news coverage of an in-store promotional tour for the film and stars of the film had teen girls flocking to Hot Topic stores everywhere.

Hot Topic needs the traffic and hopefully, the buzz has earned the chain some new customers. Like most retailers, HOTT’s profits and stock have been battered. HOTT peaked around $31 per share back in 2004 and has traded below $10 since late 2007.

The stock has been trading on the low end for quite some time and the company just came out with some pretty good earnings for the recently completed third quarter.

On Thursday, HOTT reported profits were up 11 percent on a sales increase of 5 percent. That’s an impressive rise in sales and by the looks of that rise in profits the company is controlling costs, too.

Good news all around, but I think Monday’s huge rise was probably caused by hype similar to that surrounding the film…fanatic, excessive, you get the picture.

Nevertheless, don’t underestimate the power of the teeny-bopper dollar!