Hastings Entertainment Reports Q2 Video Rental Revenue Up 7.7% on 160% Increase in DVD Rentals22 Aug, 2001 By: Hive News
Amarillo, Texas-based Hastings Entertainment Inc., owner and operator of 139 multimedia entertainment superstores, reported improved results for the quarter and six months ended July 31, 2001, causing a upward revision of second-half earnings targets.
Total revenues for the quarter increased $3.4 million, or 3.1%, to $110.1 million compared to $106.8 million for the second quarter of fiscal 2000. Total comparable-store revenues rose4.2% for the quarter and included comp increases in merchandise sales of 3.3%and rental video revenue of 7.7%. Net income for the current quarter was $0.8 million, or $0.07 per diluted share, compared to a net loss of $2.3 million, or $0.20 per share, for the same period last year.
The company operated an average of three fewer superstores during the quarter ending July 31, 2001, compared to the same quarter last year.
"Our 'back-to-basics' focus on the operational drivers of our business is having positive effects as evidenced by our results for the second quarter," said John H. Marmaduke, chairman and c.e.o., in a company press release. "We are pleased with the company's momentum as we enter the second half of the year and continue our strategies.
"One of our top priorities has been the upgrading and expanding of certainexisting superstores to bring a fresher offering to our customers, drive sales and complement our core products," said Marmaduke. "Our redesignedsmall-market store has performed beyond our expectations and we are addingcoffee bars which provide our customers a space to relax and browse.
"Additionally," he said, "by the end of the year, we will have significantly upgraded our high-margin sideline product presentation in approximately 100 of our superstores to include a full assortment of musical instruments, home electronics such as DVD players and stereos, and an assortment of novelty items geared to attract customers in specific age ranges."
The increase in rental video same-store revenues for the current quarter was driven by a 160% increase in DVD rentals over the same period last year and reflected asignificant improvement over the 148% increase in DVD rentals for the first quarter of fiscal 2001.
Said Marmaduke, "With the current adoption rate of DVD in our markets, the momentum we have created through thefirst six months of the year and the projected strength of titles to be released, we believe the second half of the year will continue to be strong for DVD rental and sales."
Contributing to the increase in merchandise comps were video sales of Miss Congeniality and Cast Away and the launch of Game Boy Advance hardware and software, said the company.
Total revenues for the six months ended July 31, 2001 were $219.3 million, up $2.4 million, or 1.1%, from $216.9 million for the same period last year.
Total comps increased 2.2% for the period comprised of increases in merchandise sales and rental video revenue of 1.3% and 5.9%, respectively.
Net income for the first six months was $15,000 or $0.00 per diluted share, up from a net loss of $2.8 million, or $0.24 per share, for the same period last year.
Dan Crow, v.p. and c.f.o., stated, "The original guidance of $0.40 per diluted share provided in our March 28, 2001 press release was based on our internalprojections. Our actual results for the six months ended July 31, 2001exceeded those projections and, with the continuing improvement of our business processes, we are raising our targeted earnings per share amount for the year ending January 31, 2002 to $0.46 per diluted share.
"Additionally, we are releasing guidance of a net loss of $0.22 per share and net income of $0.68 per diluted share for the third and fourth quarters of fiscal 2001, respectively."