Hastings Drives Q3 Comps With ’49-Cent’ Movie Rentals15 Nov, 2010 By: Erik Gruenwedel
A new program offering catalog movies for 49 cents per day helped Hastings Entertainment Nov. 15 report a 3.7% increase in third-quarter (ended Oct. 31) same-store video rental revenue.
John Marmaduke, CEO of Amarillo, Texas-based Hastings, which operates 146 entertainment retail stores in the Southwest, said last quarter’s introduction of “The 49-Cent Rental Movie Store” helped drive a 20% increase in catalog rentals compared with the prior-year period.
Indeed, the number of movie rental units declined 0.6%, compared with the prior year. The decrease was due to fewer titles released during the quarter, with gross box office revenues in the range of $20 million to $80 million, which typically represent Hastings’ strongest rentals.
“Although [video] rental sales were negatively impacted by a softer slate of titles released during the quarter … stores located near a [video store] that has closed within the last twelve months averaged an 8% increase in rental sales,” Marmaduke said.
Overall rental revenue, which included video games, fell $230,000 to $17.7 million, compared with $17.9 million last year.
Same-store movie comps increased 5.6% (compared with a 3.1% decline last year), driven by strong sales of new and used DVD boxed sets and increased sales of new and used Blu-ray Disc movies, and partially offset by lower sales of new DVDs.
Sales increases of boxed sets was attributable to a greater number of boxed set promotions, increased sales of catalog sets and several new titles that helped drive store traffic, including Sons of Anarchy: Season 2 and Dexter: Season 4.
Through the first nine months of the year, movie comps are up 8.8%, compared with a decline of 5.7% last year. Rental revenue is down $526,000 (0.9%) to $58.8 million, compared with $59.3 million last year.
For the quarter, Hastings narrowed its net loss to $3.1 million from $3.4 million, on flat revenue of $112.3 million.