Hastings Entertainment turned in its fifth consecutive quarter of earnings growth, posting almost $3 million in net income, or 28 cents per diluted share, on sales of $131.9 million, for the three month period ended April 30.
The company said the total is the best ever for the first quarter, topping the prior year’s net income of $2.5 million, or 22 cents per diluted share, on $128 million.
In addition to its record earnings — which was $2,989,000, to be exact — Hastings also turned in a 4.2% comparable-store sales increase, as every major product category posted an increase except for music, which was down 16%.
Trend merchandise, led the charge with a nearly 37% comp-store increase; followed by video games at 29.8%, and electronics at 26.8%, with the café showing a 14.2% increase; consumables up 12.5%, books up 5.6% and movies up 3.2%, according to the company.
Hastings chairman and CEO John Marmaduke said that used product was one of the engines driving results. “Buy, sell, trade, rent creates a new retailing synergy by offering greater value and selection from a seamless assortment of new and used products, while monetizing our customers’ unwanted entertainment,” he said in a statement.
Looking at operations, the company’s gross profit increased slightly to 37.1% from the prior year’s ratio of 36.8, while selling, general, and administrative costs decreased to 33.1% from 33.5%, leaving a healthy four percentage point gap.
While first quarter net income was higher than expected, the company is not revising its earnings guidance upward. “From an internal perspective, we are confident about our ability to grow our earnings for the remainder of the year; however, we are concerned about the uncertain economic outlook for the remainder of the year.” So it reaffirmed its net income guidance in a range of 95 cent to $1 per diluted share.
Its share price closed up 13 cents at $8.21 on Monday.
