Sales Boost Give HMV 'Pleasing Start'
September 06, 2007
- Global
| Retail
By Lars Brandle, London
HMV Group plc is boasting a positive turn in its fortunes with double-digit sales growth in its first quarter, the music and entertainment retail giant reported today.
Group sales for the 18 weeks ending Sept. 1 were up 12.2%, with like-for-like revenue up 5.8% over the same period. The result excludes figures from the HMV Japan subsidiary, which was spun-off in August.
Thanks in part to strong sales of DVDs and computer games, the cornerstone HMV U.K. and Ireland business generated sales growth of 12.5% for the period, with like-for-like growth of 9.6%. The affiliate has made "further progress" with gross margin management, which the company says is in-line with previous guidance.
Furthermore, the company claimed 100% growth from its HMV.com Web site, which has recently been revamped as part of a company-wide review instigated in March by group CEO Simon Fox.
The international business, which now gathers HMV Canada and seven stores in Hong Kong and Singapore, reported a 1.6% decline in like-for-like sales over the 18-week period.
In June, the company issued a dire set of financials which indicated a 73% shortfall in annual pre-tax profits to £21.6 million ($43 million) and rising debt, despite a small rise in sales.
Today's document did not break-out profits or debt.
HMV issued its trading update to the London Stock Exchange this morning, just hours ahead of the retailer's annual general meeting.
In the statement, HMV Group chairman Carl Symon said the company had made a "pleasing start" with "good momentum in sales margins and cost management."
He added, "At this point in our trading calendar we have much work to do, but we expect to approach the key Christmas period in good operational shape and with exciting offers for our customers."
As part of Fox's review, the U.K.-based company is trialling a "next generation" store, the first of which will be presented tomorrow to the media.
HMV will report its next trading update on Dec. 12.
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