Hastings Entertainment had a difficult third quarter ended October 31:
net sales dropped 4.2% to $114.6 million and the net loss grew to $2.7
million compared to $1.6 million in the same period a year ago.
Revenues were $12 million below internal forecasts.
A major drop in a formerly hot category--video games--accounted for much of the big sales decline. While a year ago video games sales at stores open at least a year rose 51.2% compared to the same period the year earlier, this year video games sales slid 9.4%. A year ago, sales had jumped because of the popularity of Grand Theft Auto: San Andreas and Fable; this year games makers were low on new titles because new gaming systems are coming to market soon.
In addition, like Blockbuster and other bricks-and-mortar movie rental businesses, Hastings's rental business has been hurt, dropping 10.1%.
Comp-store book sales fell 2.7% "as a result of a weaker hardback release schedule," the company said.
Hastings said it expects the downturn in rental business and in "certain other categories" to continue in the fourth quarter. The company is maintaining its earnings predictions for the fourth quarter but slightly lowered the full year earnings predictions. Wall Street was not pleased: on a day the Dow Jones Industrials rose 0.5%, Hastings closed at $4.96 a share, down 9.8%, on three times the usual trading volume. The stock hit a 52-week low during the day.
During the quarter, Hastings expanded its Stillwater, Tex., store and relocated its Victoria, Tex., and Yuma, Ariz., stores.
A major drop in a formerly hot category--video games--accounted for much of the big sales decline. While a year ago video games sales at stores open at least a year rose 51.2% compared to the same period the year earlier, this year video games sales slid 9.4%. A year ago, sales had jumped because of the popularity of Grand Theft Auto: San Andreas and Fable; this year games makers were low on new titles because new gaming systems are coming to market soon.
In addition, like Blockbuster and other bricks-and-mortar movie rental businesses, Hastings's rental business has been hurt, dropping 10.1%.
Comp-store book sales fell 2.7% "as a result of a weaker hardback release schedule," the company said.
Hastings said it expects the downturn in rental business and in "certain other categories" to continue in the fourth quarter. The company is maintaining its earnings predictions for the fourth quarter but slightly lowered the full year earnings predictions. Wall Street was not pleased: on a day the Dow Jones Industrials rose 0.5%, Hastings closed at $4.96 a share, down 9.8%, on three times the usual trading volume. The stock hit a 52-week low during the day.
During the quarter, Hastings expanded its Stillwater, Tex., store and relocated its Victoria, Tex., and Yuma, Ariz., stores.