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Last Updated: Tuesday, 18 January, 2005, 09:32 GMT
HMV enjoys strong festive sales
HMV store
DVD sales are underpinning growth
A last minute sales surge helped music and book seller HMV to report "strong" Christmas sales, the firm has said.

Like-for-like sales - which exclude the impact of store openings and closures - were up 6.4%, ahead of expectations.

The firm - which owns Waterstone's book stores as well as HMV outlets - also reported a 23% rise in half-year profits to 13.3m ($25m).

However, HMV warned it was taking a "cautious view of the outlook for the UK consumer economy".

Despite the caution, HMV said it expected spending to remain "sufficiently resilient" for it to meet its financial targets for the full year.

Better late than never

That final week (before Christmas) was a huge week
Alan Giles, HMV chief executive

HMV said group like-for-like sales were up 3.6% over the six months to 23 October. DVDs accounted for 40% of sales in its UK and Ireland HMV stores during this period.

However, it is the second half of the year - which includes the Christmas trading period - which is crucial for HMV as it accounts for a large proportion of its annual profits.

The five weeks to 8 January saw sales up 6.4% on a year ago, almost double what analysts had been predicting.

But HMV's chief executive Alan Giles admitted the firm was helped by a surge in sales during the last week before Christmas.

"That final week was a huge week," Mr Giles told reporters in a conference call.

"The week prior to that we were very disappointed ... and I can tell you that if you and I had spoken the Saturday before Christmas I would have been very nervous."

Bestsellers over Christmas included CDs from U2 and the Scissor Sisters, the 'Little Britain' DVD and the 'Himalaya' book by Michael Palin.

HMV said its Waterstone's book stores had put in an "excellent performance" with like-for-like sales up 7%.

The result is in stark contrast to rival book chain Ottakar's which issued a profit warning two weeks ago after lacklustre Christmas trading.

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