Hastings Posts Second-Quarter Profit2 Sep, 2003 By: Erik Gruenwedel
Increases in rental video pricing and sales of video games helped offset declines in merchandise and music sales, as Hastings Entertainment posted a slight gain for the second quarter ended July 31.
The Amarillo, Texas-based retailer reported net income of $200,000, or 2 cents per diluted share, compared to a net loss of $1.6 million, or 14 cents per diluted share, during the same period last year.
Revenue for the quarter increased $400,000, to $115.4 million.
Sales of video games and DVDs increased 70 percent and 32 percent, respectively, but overall merchandise sales declined 1.5 percent, due in large part to a 14.3 percent drop in music sales. Book sales increased 1.4 percent.
“The state of the economy certainly had a negative impact on our merchandise revenue,” said Hastings VP and CFO Dan Crow.
Dallas-based Southwest Securities analyst Arvind Behatia said ongoing declines in music sales remain “a macro-phenomenon” and will force Hastings to manage the category as a loss leader to remain competitive as a one-stop shop and destination store.
“There's not a lot [they] can do about it,” said Behatia. “You keep underperforming categories [going] to keep foot traffic coming in.”