Hastings Narrows Quarterly Loss

20 Aug, 2012 By: Erik Gruenwedel

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Sales of new and used Blu-ray Disc movies continue to shore up packaged media revenue

Hastings Entertainment Aug. 20 reported a second-quarter (ended July 31) loss of $3.4 million, down 13% from a loss of $4.1 million during the previous-year period.

The Amarillo, Texas-based retail chain operating more than 140 stores in the Southwest said the fiscal results reflected continued year-over-year comparable weak releases for movies and games. Movies, which had a slight positive increase in comparable sales, continue to be negatively impacted by the increased growth of rental kiosks and subscription video-on-demand services in movie rentals.

Indeed, rentals of DVDs and Blu-ray Disc titles decreased 13% to $15 million from more than $17.4 million in the previous-year period. Rental comps decreased 11.2% for the quarter, primarily due to fewer rentals of DVDs and video games, partially offset by an increase in rentals of Blu-ray movies.  Rental comps decreased 7.9%, primarily due to lower quality of new releases during the quarter and competition from rental kiosks and subscription-based services.

Same-store sales of movies grew 0.4% in the quarter, primarily due to increased sales of new and used Blu-ray movies, partially offset by declining sales in new and used DVDs, including boxed sets. Music comp sales decreased 11.6%, primarily resulting from lower sales of new and used products and the continued shift to lower priced promotional goods.

Video game comps decreased 22.8%, primarily due to lower sales of video game consoles, new gaming accessories and new video games, partially offset by increased sales in used video game hardware and accessories. Sales in the video game industry, as a whole, continue to struggle and are down significantly due to a lack of new video game releases and weak console sales.

Overall revenue, which also includes in-store cafes, trends, consumables and electronics, dropped 3.8% to $89.3 million from $92.8 million last year.

“We are pleased to announce a significant decrease in pre-tax loss for the second quarter compared to the second quarter of fiscal 2011,” CEO John Marmaduke said in a statement.

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