Hastings Q1 Income Falls 43%, Besting Projections18 May, 2009 By: Erik Gruenwedel
Citing the ongoing retail malaise due to the recession, Hastings Entertainment May 18 reported first-quarter (ended April 30) net income of $1.7 million, compared to income of $3 million during the previous year period — exceeding projections.
“Net earnings for the quarter were better than our internal forecast,” said Dan Crow, VP and CEO, in a statement.
With packaged media sales down more than 10% industry wide in the first quarter, Amarillo, Texas-based Hastings zeroed in on cutting inventory expenses $13.3 million and reducing long-term debt $9.2 million.
Indeed, with fewer new release DVD movies in the quarter, Hastings said overall same-store (open at least 12 months) rental comps dropped 7.6% with rental revenue topping $21.5 million, compared to $23.6 million last year. Movie rental comps dropped 9% (offset slightly by increase in Blu-ray Disc rentals) while video game rentals increased 4.3%.
Rental comprised 17.2% of Hastings’ revenue, compared to 17.9% last year.
Same-store new movie disc sales declined 4.3%, compared to a 3.2% rise last year, offset by increased sales of Blu-ray titles and used DVDs.
Video game comps fell 9.1% due to lower sales of older-generation games and consoles, partially offset by increases in software sales for the Xbox 360, PlayStation 3 and Nintendo Wii.
Music sales continued their downward spiral, with comps falling 13.9% in the quarter, including 31 stores significantly reducing music’s retail footprint.
Overall revenue exceeded $125 million, down 4.8% from $131 million last year.
Key revenue drivers included in-store café and electronics same-store sales, up 10% and 7.1%, respectively. Trends, which include apparel and action figures, increased 6.6%.
“We continue to focus on our balance sheet and reducing costs,” said John Marmaduke, CEO and chairman, in a statement.
Hastings, which operates 153 retail stores throughout the Southwest, does not conduct financial conference calls.