At the same time, the company plans to eventually remodel 60 to 80 of its Hot Topic stores into a new design that is already in place in a number of existing locations. Hot Topic's CEO, Betsy McLaughlin, said in the conference call that stores remodeled during 2006 were faring well.

Although the company is not announcing specific results for the remodeled stores versus the original format, McLaughlin said that the remodeled locations "are performing better than the control stores against which they are measured." For 2007, McLaughlin said, half of the total remodeled stores "will be located in high-visibility, high-performing malls."

Hot Topic has engineered the cost of the remodeled stores to be same per square foot as the cost of the existing design, according to McLaughlin. The expansion and remodeling plans follow a fourth quarter of fiscal 2006 during which the company opened two Hot Topic stores and two Torrid stores while closing one Hot Topic store.

McLaughlin also commented that the company was disappointed with both its slide in earnings during the fourth quarter and its 5.3% decline in comparable store sales. Hot Topic reported net income of $8.9 million, or 20 cents per share, for the fourth quarter that ended Feb. 3.

The quarterly earnings compared with earnings of $10.6 million, or 23 cents per share, for the comparable quarter a year ago. The fourth-quarter results included a one-time charge of $2.8 million, or four cents per share, against earnings.

Sales for the period, which was a 14-week quarter, increased 4% to $240.5 million compared to $230.4 million for the 13-week period ended Jan. 28, 2006. Although disappointed with the company's bottom-line results, McLaughlin expressed optimism about the Torrid concept, saying that it improved strongly in the fourth quarter, with gains in transaction count, average dollar sale and gross margin.

The expansion of the Torrid stores this year will be "in established, successful markets, and will focus on regional customer preferences," McLaughlin said. "Although we have not released separate metrics for Torrid, we are confident in the viability of the brand and the differentiated niche that it serves," she added.

Hot Topic, a mall-based retailer, operated 694 stores with the Hot Topic brand and 131 with its Torrid brand at the end of the quarter, compared with 663 Hot Topics and 120 Torrid stores at the end of the fourth quarter of fiscal 2005. The Hot Topic stores carry apparel, accessories and gifts for men and women between the ages of 12 and 22, with the Torrid format carrying plus-size clothing and accessories that target young women between the ages of 15 and 29.