Lowered Earnings Outlook, Flat Sales Cap Trans World's Third-Quarter Results13 Nov, 2001 By: Hive News
Music and video retailer Trans World Entertainment Corporation on Tuesday announced that, for its third quarter ended Nov. 3, 2001,total sales increased by 3% to $273.4 million, compared to sales of $265.6 million for the third quarter of2000. Comparable store sales in the third quarter of 2001 were down 2%.
In line with previously announced expectations, the company incurred a net lossfor the quarter of $11.6 million, or 28 cents per share, compared to a net lossof $15.6 million, or 32 cents per share, in the comparable quarter of 2000.
In the third quarter, gross profit as a percentage of sales was 32.5%, comparedto 34.5% of sales for the same period in 2000. Selling, general and administrative expenses increased to 36.1% of sales as compared to 34.0% in the third quarter of last year.
"Although the events of September 11 and the challenging economicenvironment have impacted our financial results, it is important to note thesignificant milestones we have achieved toward enhancing Trans World'sleadership position and ensuring the company's long-term growth andprofitability," said Robert J. Higgins, chairman and c.e.o.
"During the third quarter we launched our FYE brand and FYE.com, began the roll-out of our eWorks technology initiative and forged an important partnership with Microsoft," he said.
Higgins added, "Through our new partnership with Microsoft, FYE is creating a personalized entertainment shopping experience that will drive cross-channel sales between stores and the FYE website. In addition, throughthis partnership, FYE will create the entertainment industry's most robust andcomprehensive customer relationship management system. We expect thispartnership and the related technology initiatives to positively impact thecompany's net income beginning in the fourth quarter of 2002."
Sales for the 39-week period ended Nov. 3, 2001 increased 2% to $877.0 million, compared to $861.2 million for the same period last year.Net loss for the 39-week period was $17.7 million, or 42 cents per share compared to net income of $0.1 million in the comparable 2000 period.
Based on the current economic environment, the company said it is reducing its fourth-quarter estimated earnings per share to between 80 cents and 85 cents.
In addition to its mall locations, operated under the FYE brand, Trans World also operates freestanding locations under the namesCoconuts Music and Movies, Strawberries Music, Spec's and Planet Music.