Trans World Entertainment Posts Q1 Profit21 May, 2015 By: Erik Gruenwedel
Trans World Entertainment May 21 reported a first-quarter (ended May 2) profit of nearly $200,000 compared with a loss of $400,000 during the previous-year period. Revenue decreased 10% to $78 million from $87.2 million, due in part to a 7% reduction in store count from 333 locations to 310.
Albany, N.Y.-based Trans World operates the f.y.e. (For Your Entertainment) and Suncoast packaged-media and trend retail chain, in addition to Second Spin previously-owned merchandise stores and related websites such as Wherehouse.com.
Comparable-store sales increased 18% in trend (action figures, T-shirts, posters, collectibles) and electronics categories. Free cash at the end of the quarter increased by $13 million, driven by a $19 million reduction in inventory.
Video comp sales decreased 7.4% in the quarter, representing 46% of total revenue compared with 48% during the prior-year period. Video, which includes DVD and Blu-ray Disc titles, was negatively impacted by a stronger release slate a year ago, led by Walt Disney Studios Home Entertainment’s animated hit Frozen.
Music comp sales dropped 7.1%, which accounted for 27% of revenue compared with 28% a year ago. Ongoing music CD sales declines were offset by an uptick in vinyl sales.
Trend comp sales increased 26.5%, which represented 15% of sales from 11% a year ago. Electronics increased 6%, representing 9% of revenue, up from 8% a year ago. Video game sales plummeted 43% driven by 50% drop in hardware sales. Games represented 3% of total sales compared to 5% a year ago.
Trend continues to be a revenue driver among home entertainment retailers, including Hastings Entertainment and MovieStop, which were recently acquired by Draw Another Circle LLC, whose other business interests include licensing and merchandise rights to Marilyn Monroe, Muhammad Ali and Elvis Presley, including operating Graceland, which reportedly attracts 500,000 visitors annually to Presley’s home in Memphis, Tenn.
“As these categories become a larger portion of our business, they’ll have a positive impact on both total comparable store sales and margin,” Trans World Entertainment CEO Mike Feurer said on the fiscal call.