Hot Topic, Inc. Reports Month-to-Date July Comparable Store Sales Results and Revises Second Quarter Earnings Guidance.

CITY OF INDUSTRY, Calif. -- Hot Topic, Inc. (Nasdaq:HOTT) announced today that comparable store sales month-to-date through July 27, 2005, have decreased approximately 5 percent from the same period last year. As a result, the company currently estimates that net income for the second quarter of 2005 will be approximately $0.02 to $0.04 per diluted share.

Betsy McLaughlin, Chief Executive Officer, said, "Our Hot Topic sales trends in July have been very disappointing. While the music related categories have remained strong and are producing positive comps, the comp sales trends in men's apparel, women's apparel and accessories have remained negative and are below our expectations. Even with increased promotional activity versus last year, we are seeing comparable store decreases in our early back-to-school markets. Our previous sales and earnings guidance for the second quarter assumed continued strength in music along with improvement in two of the three negative comp categories. Given the early results, we are revising our earnings guidance for the quarter to reflect the current trends. We will not have a true understanding of our back-to-school business until late August."

Hot Topic, Inc. is a national mall-based specialty retailer. Hot Topic offers apparel, accessories and gifts to young men and women principally between the ages of 12 and 22. Torrid, the company's second concept, provides plus-size fashion-forward apparel and accessories that target young women principally between the ages of 15 and 29. As of July 28, 2005 the company operated 628 Hot Topic stores in all 50 states and Puerto Rico, 100 Torrid stores, and Internet stores www.hottopic.com and www.torrid.com.

In addition to historical information, this news release contains forward-looking statements, which include statements relating to financial results, guidance, projections and other financial performance, and managing growth. These statements involve risks and uncertainties, including risks and uncertainties associated with meeting expected financial results, management of growth, relationships with mall developers and operators, the risk that available cash or mall space will not be adequate for planned expansion, fluctuations in sales and comparable store sales results, risks and uncertainties with respect to new store openings including risks associated with the company's new store concepts and Internet stores, music and fashion trends, competition from other retailers, uncertainties generally associated with specialty retailing, the effect of economic conditions, the effect of severe weather or natural disasters, political and/or social changes or events that could negatively impact shopping patterns and/or mall traffic as well as other risks detailed in the company's SEC reports, including its Quarterly Reports on Form 10-Q and its Annual Report on Form 10-K for the year ended January 29, 2005. Historical results achieved are not necessarily indicative of the future prospects of the Company, and actual results or circumstances could differ materially from the forward-looking statements.