Hastings Increases Q3 Loss21 Nov, 2005 By: Erik Gruenwedel
Hastings Entertainment posted a third-quarter (ended Oct. 31) loss of $2.7 million, compared to a loss of $1.6 million during the same period last year. The company blamed the decline on the ongoing slump in home entertainment sales and rentals.
Total revenues for Amarillo, Texas-based Hastings dropped 4.5 percent to $114.6 million, compared to $119.6 million last year. Of the revenue decline, same-store video rental comps dropped 10.1 percent and revenue dropped 9.9 percent to $21 million, compared to $23.3 million last year. Merchandise comps fell 3.1 percent; revenue decreased 2.8 percent to $93.5 million, from $96.2 million.
Same-store video game sales dropped 9.4 percent, compared to a 51.2 percent increase last year due largely to strong consumer response to titles Grand Theft Auto: San Andreas and Fable, among others. A weak music release slate contributed to a 2.4 percent comp drop from last year.
“Retail revenues, particularly video and music, continued to decline and the weakness in these markets was even more severe in the third quarter,” said John Marmaduke, chairman and CEO.
Marmaduke said he was pleased by the company's improvement in cost controls relating to merchandise and rental costs, which were approximately $1.7 million lower than in the prior year quarter.
Unfortunately, selling, general and administrative expenses (SG&A) related to increased health care, labor and write-off costs increased $2.6 million to $44.9 million. As a percentage of total revenues, SG&A increased to 39.2 percent, compared to 35 percent last year.