HMV details "difficult fourth quarter"

Retail giant HMV has outlined it's financial results for the year to April 24, 2010 as well as the fourth quarter (the 16 weeks to April 24) revealing a tough time since the start of this year - but overall slight growth in sales over the year as a whole.

The company posted an overall sales shrinkage of 5.8 per cent in Q4, with HMV UK & Ireland and HMV International struggling at shrinkage figures of 8.2 per cent and 9.5 per cent respectively. Its Waterstone's business offset that to a degree, with sales falling by 4.3 per cent, while the HMV Live business brought the overall figure down to 5.8 per cent.

But stronger results over the rest of the year, before calendar 2010, helped the company to an overall sales growth across all its brands of 1.8 per cent.

"HMV UK, as expected, had a difficult fourth quarter, and we planned accordingly by tightly managing margins and discretionary costs," said Simon Fox, HMV CEO. "However, the severe weather in early January and reduction in campaign activity in favour of preserving margin further impacted the like for like out-turn. Therefore, I am pleased to be able to confirm that the Group's profit before tax will be in line with expectations, comfortably ahead of last year.

"We are focused on progressing our new strategy laid out on 26 March 2010 to rapidly evolve HMV's product mix, grow the new HMV Live division and continue to turn around the performance at Waterstone's. We remain confident that these initiatives will position the Group to achieve our medium target for a sustainable 4.5 per cent net margin."

However, investors were troubled by the results, and the company's share price fell sharply at the opening of the markets today, down around 6 per cent in the first hour of trading, and standing at 74.35 pence at the time of writing.