Hastings Entertainment completed a turbulent fiscal 2001 with sales up 2.9%, to $458.2 million, but with a net loss of $14.6 million, compared to a loss of $2.2 million in the fiscal year ended January 31, 2000.
The retailer said the higher loss was due to lower gross margins, which resulted from a series of initiatives aimed at improving inventory turns in order to improve the company's cash flow and inventory offerings as well as to reduce markdown expenses. The implementation of the initiatives, however, resulted in higher returns and increased markdowns in the first part of the year. Sales volume was also down in certain categories. Hastings began seeing benefits from its new inventory model in the fourth quarter, when the retailer reported a slight operating profit compared to a $3-million loss in last year's fourth quarter.
The company's forecast for the current fiscal year calls for comparable store sales to be up 4% (compared to flat comps last year) and for the company to post a 1.4% operating margin. Hastings, which had 142 superstores at the end of fiscal 2001, expects to open seven new outlets this year.
