Book comps fell 4.2% in the fiscal year ended January 31 at Hastings Entertainment, one of only two categories to post negative comps for the year (music was the other). Book sales were particularly soft in the fourth quarter, declining 7.0%, which Hastings attributed to decreased sales of new trade paperbacks, mass market books, and hardcovers, which Hastings said was due to some degree to “the increasing popularity of electronic book readers.” Sales of used hardcovers rose approximately 10.0% for the quarter, and sales of value books increased 12.5%.
The 4.2% decline in book comps for the full year was driven by lower sales of new trade paperbacks, mass-market books, and hardcovers, and lower sales of magazines, partially offset by increased sales of used trade paperbacks and hardbacks. The decline in sales of the Twilight saga, which fell by 75%, also hurt book results.
For the entire company, net income fell to $1.7 million last year, from $6.9 million; earnings in 2009 included a series of one-time gains of about $6 million. Revenue fell 1.9% for the year, to $521.1 million, with overall comps up 1.4%. Hastings operated three fewer stores in the fourth quarter in 2010 than in 2009. The best performing categories were trends, café and movies.
Hastings chairman John Marmaduke noted that one of the retailer’s major objectives for 2010 was to expand its new and used comics section; there are now 126 stores with larger sections and the format generated $5 million in sales last year, an increase of 49%.
In a prepared statement, Marmaduke said the company was well positioned to take advantage of the consolidating retail market, noting the 30 competitors had announced they will be going out of business since January 31. “We believe consumers still want the ability to see and touch products, and therefore Hastings continues to evolve and give our customers a unique shopping experience, the ability to buy, sell, trade, or rent, combined with our online website which allows customers to shop online or stay up to date with their favorite local Hastings," said Marmaduke. “Due to our flexible multimedia store model and seamless selection of new and used products, we believe that Hastings Entertainment is a sustainable retailer and we will see profitable growth and a bigger market share as many of our competitors cease to exist."
Hastings plans to close only 2 stores in the year, open 2 and relocate 2. It has allocated $16.1 million for capital expenditures and expects comps sales to increase in the low single digits in the year with net income finishing between $2.0 million to $2.5 million. No mention of a plan to sell e-books.
