Hastings Boosts Revenue, But Drops Profit31 Mar, 2005 By: Kurt Indvik
DVD and video game revenue for Hastings Entertainment leapt 38.3 percent and 32.7 percent, respectively, for the fiscal year 2004 ended Jan. 31, the company reported today.
Comparable-store revenue for the chain was up by 5.0 percent overall, video/video game rental comps dropped 4.5 percent, and sales of VHS product plummeted 45.4 percent for the fiscal year, according to the chain.
Hastings generated $542 million in total revenue for fiscal 2004, an increase of 6.6 percent from 2003. For the fourth quarter, the company boosted revenue by 6.1 percent from the same period last year, to $173.1 million .
But for all that revenue growth, net income for Hastings dropped precipitously for the year, ending with $5.8 million, or $0.49 per diluted share, for 2004, as compared to 2003, when the company generated net income of $8.3 million, or $0.72 per share, in 2003.
“We were pleased with our fourth-quarter sales performance,” said John Marmaduke, chairman and CEO, “but disappointed that higher expenses attributable to integrating a new warehouse management system, shrinkage and reductions in vendor settlements, along with a shortfall in rental contribution rate, primarily game rental, kept us from realizing additional profits from our strong sales.
“We plan to consolidate the market-share gains made in fiscal 2004 by continuing our store remodeling program. The addition of used books to our mix will help us rebrand the chain ‘Buy Sell Trade Rent' this summer,” Marmaduke added.
Comp sales in books and music for the chain rose just a little more than 1 percent.