Hastings Entertainment narrowed its loss during the fiscal third quarter, which ended Oct. 31.

Hastings Entertainment narrowed its loss during the fiscal third quarter, which ended Oct. 31.

The 152-unit chain reported a loss of $1.8 million, or 15 cents per diluted share, on sales up 5.9% to $119.6 million. In the fiscal third quarter in 2003, Hastings lost $3.8 million, or 34 cents per share, on sales of $112.8 million.

The increase in sales was attributed principally to a 3.8% comparable-store uptick. By product category, video sell-through was up 9.8%, and videogames were up 51.2%. Music sales were down 0.7%, and so too was video rental, but the latter trend is due to a consumer shift toward purchasing movies.

In a statement, Hastings forecasts that for the fiscal year ending Jan. 31, it will earn 90 cents-95 cents per diluted share; the company had previously offered guidance of 80 cents-85 cents per share.

The company’s gross margin declined to 33.6% from 34% during the third quarter, with part of that attributed to a decrease in revenues from the higher-margin video rental category. In a statement, Hastings chairman/CEO John Marmaduke also cites the conversion to a new warehouse management system, which led to higher distribution costs.

Selling, general and administrative expenses, meanwhile, declined to 35.5% from 36.9%, due to lower advertising costs and an increase in store labor productivity.

For the nine-month period to Oct. 31, Hastings has lost $549,000, or 5 cents per diluted share, on $294.8 million in volume. In the same period last year, it posted a loss of $4.7 billion, or 41 cents per share, on sales of $269.9 million.

Hastings stock was trading today (Nov. 22) after the announcement at $7.55, up 8.8% from yesterday's $6.94 close.