DVD Sales, Rental Soften Hastings Q3 Loss20 Nov, 2006 By: Erik Gruenwedel
Led by a 16.9% increase in comparable same-store (open at least a year) video sales and a 2.7% increase in same-store video rentals, Hastings Entertainment posted a third quarter (ended Oct. 31) loss of $2.2 million, compared to a loss of $2.7 million during the same period last year.
Total rental revenue, including video games, topped $21.4 million compared to $21 million last year.
The Amarillo, Tex.-based retailer recorded revenues of nearly $120 million compared to $114.5 million last year. Principle drivers included sales of the Microsoft Xbox 360 video game console and related software and new release DVD movies (compared to VHS), DVD box sets and used DVDs.
Video game same-store comp sales increased 11.1%.
A dearth of premier artist CD releases and slumping used CD sales resulted in same-store music comps dropping 4.4%.
Gross profit dropped to 34.9% compared to 35.8% last year due to increased price markdowns (sales) and inventory shrinkage.
Hastings relocated a store in Amarillo and operates about 150 through the southwest.
Motivated by what it believes will be a robust holiday shopping season underscored by a new merchandising plan implemented in the second quarter, Hastings upped its fiscal year 2006 guidance for per-share net income range from 58 cents to 63 cents to a range of 65 cents to 70 cents.
The company did not hold an investor call to discuss results.