Trans World Q3 Sales Slip 7 Percent10 Nov, 2005 By: Holly J. Wagner
Trans World Entertainment Corp.'s comp-store sales dropped 7 percent in third quarter ended Oct.29, mirroring the trend at more narrowly focused video specialty stores.
The chain had a loss of $11.5 million on total sales of $241.4 million, compared to $270 million sales and a $4.6 million loss in the third quarter of 2004. The chain was operating 6 percent fewer stores at the end of this year's quarter.
"Sales and earnings for the third quarter were in line with our previously announced expectations and reflect a general weakness in music and DVD sales and a lack of strong new releases," saod chairman and CEO Robert J. Higgins. "We made good progress in the quarter toward initiatives that we believe will improve our operating results. We completed the implementation of Backstage Pass, our customer reward program and are encouraged by early results. We are installing our next generation listening and viewing stations, or LVS 3, and will have over 200 stores on line in time for the holiday selling season. We are also piloting an in-store Digital Zone in three stores, featuring music downloads, CD burning and other customer-focused technologies.”
Gross profit as a percentage of sales in this year's quarter was 34.4 percent versus 37 percent in the third quarter of 2004. SG&A as a percentage of sales was 38.8 percent compared to 37.4 percent last year.
Cumulative sales for the 39-week period ended Oct. 29 were $779.9 million with a loss of $19.4 million, compared to $851.7 million sales and $7.2 million net income in 2004, partly on the strength of closing a federal income tax examination and an extraordinary gain of $3.2 million related to the 2003 Wherehouse acquisition.
Trans World operates 800 retail stores – 52 fewer than last year -- in 46 states, the District of Columbia, the U.S. Virgin Islands, Puerto Rico and e-commerce sites under the f.y.e, Coconuts Music and Movies, Strawberries Music, Wherehouse, CD World, Spec's, Second Spin and Planet Music brands.