Transworld Narrows Loss14 Aug, 2003 By: Holly J. Wagner
A weak release slate put drag on comp-store sales at Trans World Entertainment for the second quarter ended Aug. 2, although the chain narrowed losses from the same quarter a year ago, executives said today.
Comparable store sales of the top 50 DVD titles were up 5 percent from the second quarter of last year; but that compares to an improvement of 33 percent in comp-store top 50 DVD sales from the first quarter of 2002 to the first quarter of 2003. Anticipating a strong release slate for the balance of the year, chairman and CEO Robert Higgins said he expects a 40 percent bump in top 50 DVD sales in the third quarter.
“For the balance of 2003, we will be focused on remerchandising and marketing our stores, which will lead to improved music sales, while increasing usage of our in-store LVS [listening and viewing station] technology,” Higgins said.
The chain ended the second quarter with 826 stores, after opening one, relocating two and closing 18 during the second quarter.
Video and games have grown to 31 percent of the chain's business and Higgins said used CDs, DVDs and games are a growth area.
Net loss for the second quarter was $2.9 million, or 8 cents per diluted share, compared to a net loss of $7 million, or 17 cents per diluted share, in the second quarter 2002. The gross profit rate for the quarter increased to 39.1 percent from 36.8 percent last year. The second quarter 2003 results also include a benefit of $2.1 million, or $0.05 per share, arising from an agreement to settle with the IRS litigation related to the sale of Camelot Records. The benefit was recorded as a reduction of income taxes.