Trans World Entertainment Corporation notched its tenth straight quarter of improved operating results and could finish 2012 in the black. The retailer's second quarter net loss of $1.9 million was an improvement of $5.9 million while revenues dropped 16% to $91 million. Its first-half profit $910,000 was an improvement of $10.7 million.
During Thursday's earnings call CEO Robert Higgins called the quarter "the best operating performance since fiscal 2000." The company has closed underperforming stores (it ended the quarter with 379 stores, down from 440 a year ago), improved gross margin, reduced inventory and refrained from dipping into its line of credit. A few years ago the company was pushing its website and in-store digital kiosks. Now it's getting back to basics.
But the company, which operates retailers such as f.y.e., didn't getting much help from what Higgins described as a "terrible" slate of new music releases in the first two quarters of 2012. The CEO said comparative store (stores that have been open for more than a year) music sales were down 13% and the music's share of total revenue dropped to 34% from 37% in the prior-year quarter.
Video comparable sales rose 7% and represented 43% of sales during the second quarter. Electronic and trends comparable sales rose 9% and 13%, respectively. Video game comparable sales sank 12% and accounted for 4% of total sales.
The earnings release was the first made with John Anderson as acting chief financial officer. Anderson replaced Tom Seaver, who was named Trans World's chief financial officer in November.