Hastings Profit Declines, But Home Entertainment Revenue is Up18 Aug, 2008 By: Erik Gruenwedel
Negative same-store comparable book and music CD sales contributed to Hastings Entertainment posting second quarter (ended July 31) income of $700,000, compared to income of $1.9 million during the previous-year period.
Amarillo, Texas-based Hastings said the uncertain economic outlook for the rest of the year clouded quarterly results, resulting in a slight total revenue decline to $125.6 million from $125.9 million last year.
Consequently, same-store comp DVD movie revenue increased 2.6% due to new releases and Blu-ray Disc, compared to an increase of 10.6% last year. Video game comp sales rose 4.6%, compared an increase of 14% last year.
Principal DVD sellers included National Treasure: Book of Secrets, The Bucket List, P.S. I Love You, Jumper and 10,000 B.C.
Citing the poor economy and internal analysis, Hastings implemented a price reduction on previously viewed DVDs resulting in $200,000 less revenue than the same period last year, an unplanned move company officials said was the primary cause for not meeting the internal quarterly forecast.
Rental revenue for new and used DVD movies and video games increased 0.8% to $21.8 million, compared to $21.6 million last year. Comp-store rental revenue increased 2%.
Total merchandise revenue declined 0.4% to $103.8 million from $104.2 million during the period last year. Music CD comp sales dropped nearly 12%, compared to a 14.2% decline during the same period last year.
Book sales decreased 1.1% due to an unfavorable comparison to last yearÆs print release of Harry Potter and the Deathly Hallows.
ôOur comp-store revenues showed healthy growth during the second quarter, in light of a challenging retail environment,ö said CEO John Marmaduke in a statement. ôElectronics, trends, consumables, caf?, video games and movies all showed strong growth.ö
Hastings shuttered one store location in Galveston, Texas, which resulted in a $400,000 drop in revenue and contributed to about $200,000 in pre-tax costs.
Hastings operates 152 stores throughout the Southwest.