Hastings reported third quarter sales of $114 million, down six percent from a year ago. Leaving aside rental revenues, sales of merchandise were down 5.1 percent on a same-store sales basis. But books outperformed many of their other media categories, as “books comps increased 1 percent for the quarter, due to strong sales of new trade paperback as well as used trade paperback and used hardbacks, partially offset by lower sales of periodicals.”
The company swung from a slim profit this time last year to a net loss of $3.7 million for the quarter. (That loss includes a special $400,000 depreciation expense and an income tax expense of $700,000 related to an IRS audit.)
Hastings lowered their guidance for the fiscal year to earnings of between 50 and 55 cents a share (or about half of what they had been projecting), and cfo Dan Crow says they are “estimating our fourth quarter comp revenues to drop in the low to mid single digits which compares to our original estimate of an increase in the mid single digits.”
CEO John Marmaduke says in the release, “Beginning with September, changes in consumer spending have created the most difficult retail environment we have ever seen. In an effort to drive sales without the benefit of significant video releases, we were highly promotional during the month of October. Obviously we are concerned about the fourth quarter in light of the current economic climate.” He underscores, “we have an excellent credit facility with Bank of America in the amount of $100 million, which does not expire until August 2011 and provides us with sufficient working capital for the foreseeable future.”
Release