Trans World Lowers Guidance19 Oct, 2005 By: Stephanie Prange
Trans World Entertainment Corp. today announced that it expects to report lower earnings for fiscal 2005 than previously announced. The Company expects earnings of 25 cents to 30 cents per share for the year compared to the previously disclosed range of 65 cents to 70 cents per share.
For the third fiscal quarter, the Company expects a net loss of 33 cents to 38 cents per share compared to a net loss of 14 cents per share last year. Last year's net loss included an extraordinary gain of $600,000, net of taxes, or 1 cent per share related to the acquisition of the Wherehouse Entertainment Stores in 2003. Comparable store sales for the third fiscal quarter are expected to decline between 6 percent and 7 percent.
“Sales for the quarter have been affected by a general weakness in music and DVD sales and the lack of strong new releases,” said Robert J. Higgins, Chairman and Chief Executive Officer of Trans World in a statement. “At the same time our gross margin has been impacted by the increasingly competitive environment for music and DVD."
"Due to the current environment, we are being more cautious about consumer spending and expect comparable store sales in the fourth quarter to decline in the mid single-digit range," Higgins added. "We remain committed to implementing our customer focused programs including the LVS 3, our third generation listening and viewing stations, and the recently completed roll out of Backstage Pass, our customer reward program.”
Trans World Entertainment is a leading specialty retailer of music, video and video game products with more than 800 retail stores in 46 states, the District of Columbia, the U.S. Virgin Islands and Puerto Rico. In addition to its mall locations, operated primarily under the f.y.e. brand, the Company also operates freestanding locations under the names Coconuts Music and Movies, Strawberries Music, Wherehouse, CD World, Spec's, Second Spin and Planet Music.