Although sales for the third quarter ended October 31 increased at both Zany Brainy and Hastings Entertainment, it was the children's multimedia retailer that had the better period.
Revenues at Zany Brainy jumped 52% to $46.7 million, and the company cut its net loss to $2 million from $3.9 million in the comparable period in fiscal 1999. During the quarter, comparable store sales were up 3%, and Zany opened 12 new stores, giving the retailer a total of 103 outlets in 26 states. Zany also launched its new Web site during the period in a joint venture with Online Retail Partners (News, Nov. 1).
Company chairman Keith Spurgeon said that with the new stores and Web site, Zany Brainy is well positioned for the key holiday season. For the nine-month period, sales were up 50% to $131.4 million, and comparable store sales rose 7%. Zany cut its net loss nearly in half, reducing it from $10.7 million to $5.5 million.
Things weren't so rosy at Hastings, which, despite a 10.1% increase in sales to $100.9 million, reported a net loss of $2.3 million, compared to a net income of $1.3 million in last year's third quarter. Earlier this fall, Hastings warned investors that lower-than-anticipated rental revenues and higher-than-expected purchase costs would result in a loss in the quarter (News, Nov. 1). The same combination of factors is expected to drag down results in the fourth quarter as well. To help shore up profitability, Hastings recently hired a new chief financial officer, Tom Nugent.
For the first nine months of the year, sales rose 11.6%, to $303.9 million, with comparable store sales up 4.2 %. Net income fell to $1.5 million from $4.3 million. Hastings expects to finish up the year with 149 stores.
