Friday May 9, 11:15 AM
HMV says turnround on track as sales jump
By Lucy Killgren
HMV on Friday provided more evidence that its turnround was on track as the music and entertainment retailer reported a 13.8 per cent rise in like-for-like sales at stores in the UK and Ireland. Total sales grew by 18.4 per cent. The shares jumped
5.7 per cent early trade in London to 157¾p, but fell back to stand 3.5 per cent higher at 144p, by late morningLike other entertainment retailers, HMV is reaping the benefits of the popularity of a new generation of computer game platforms such as the Nintendo Wii. But it said that if game sales were stripped out, like-for-likes would have been ahead by 8 per cent in its HMV UK stores, as it increased share in the music and DVD market. Simon Fox, chief executive, said: "We are gaining share in music and DVD. We're ahead by about 7 per cent in terms of items sold in CDs. In DVDs we're ahead by 20 per cent. This is against the broader market which in CDs is down 9 per cent and in DVDs up by about 3 per cent. About 1 per cent of the increases is picked up from competitors no longer on the high street." The group said it was confident that pre-tax profits would be towards the upper end of market expectations, which it said were in the range of £46m-£58m. David Jeary, analyst with Investec Securities, said: "The group has been one of the few retail beneficiaries of the poor weather in March and April." Mr Jeary who was not alone in his pessimistic view of the retailer said that Investec's negative stance "had not been our best call" in the sector . HMV is still the most heavily-shorted stock in the FTSE 250 (news) , according to Data Explorers, which tracks short selling. "While we still have concerns in several areas, the ongoing strength of games and DVD backed by costs savings could well offset the already evident structural decline in music more strongly and for longer than previously anticipated," Mr Jeary added. HMV's sales did not include the launch of Grand Theft Auto IV the computer game which is expected to break sales records and help boost trade in the coming year. The company is refitting many stores, and has earmarked up to 15 for refurbishment and plans to open five new stores in the current financial year. International like-for-like sales at HMV - excluding the Japan unit, which it sold last year - rose 2.2 per cent in the 16 weeks to April 26. Waterstone's, the book retailer reported like-for-likes up 6.6 per cent. Group like-for-like sales rose by 10.1 per cent and total sales grew 11.9 per cent. Mr Fox said: "As we complete the first full year of our three-year turnround plan, we are ahead of where we expected to be".
Click here for more from FT.com
|
Send Article by Email
