Albany, N.Y. Trans World Corp. earned a profit of $11.4 million in its 2009 fiscal fourth quarter, breaking its three-year long string of unprofitable quarters.
The company, which owns the f.y.e. (For Your Entertainment) chain of stores, was profitable even though total sales in the quarter fell 14% to $295.4 million. Same-store sales fell 7% in the quarter.
Trans World president and CEO Robert Higgins said that the company cut costs and generated revenue by renegotiating rents or closing stores and selling the inventory.
The drop in sales matched the percentage decline in the number of stores that Trans World operated in the fourth quarter. The company ran 655 stores during the quarter, compared with 763 in fourth quarter 2008.
The company continues to refine its sales strategy in response to competition from big-box discounters, specialty stores and online retailers. For instance, video games were dropped from more than 100 stores.
For the year, Trans World lost $42.4 million in fiscal 2009, compared with a net loss of $69 million in the year before. Total sales in 2009 declined 18% to $814 million, while same-store sales fell 10%.
“2009 was another challenging year in terms of comp sales and operating results,” Higgins said. “However, our financial position is stronger now than at the end of last year.”
The company ended the fiscal year with $71.5 million in cash, compared with $30 million last year.
“With a core group of stores, we are in a position to turn around results,” Higgins said.