Trans World Entertainment reported much reduced profits for Q4 and the full year, but was able to get its comp sales up to flat for the holiday quarter, behind big increases in trend merchandise and electronics.  For the year, comp store sales were down 1%, a good performance for a retailer whose biggest categories are still packaged video and music, both of which showed substantial declines.

The key to TWE’s sales was Trend merchandise, which typically includes licensed TV and movie products, graphic novels, and other geek merchandise.  Trend was up 30% in Q4, according to the SeekingAlpha transcript of the earnings call, and was 20% of sales for the quarter compared to 15% in the year ago period.  Video sales were down 8%; the category was 41% of sales for the quarter vs. 44% in Q4 2013. 

The company continued its reduction in the number of stores it operates, closing 17 stores in the quarter and was down to 310 stores at the end of the year, vs. 339 a year ago (operating primarily under the f.y.e. and Suncoast brands).  Store closings were the big driver of sales declines; sales were down 8.8% for the quarter and 8.9% for the year.

But profits were down a lot more, continuing a trend that began earlier in the year (see "TWE Suffering Down Year").  Profits for the year plummeted from $8.3 million in 2013 to $1.8 million in 2014, on $358.5 million in sales.  Gross margin was up a couple of ticks; the profit decline was driven by expenses that were not dropping as fast as sales.

The company seemed sanguine about the results, perhaps because its balance sheet has over $100 million in cash, driven in part by reduced inventory.  TWE plans to continue to repurchase shares; it still has around $16 million in funds authorized for the purpose.