For the nine-week period leading up to and through the holidays, meanwhile, per-store sales were up 1% and total sales were off slightly to $426 million from $451 million, Higgins announced. For the 11-month period ending Jan. 1, comparable store sales rose 1% and total sales rose 3% to $1.277 billion.

"Our sales results during the holiday season were in line with our expectations," Higgins told analysts yesterday.

TWEC officials attribute the results to some "major steps" the company has taken to deal with a music store business that has been under siege from technology, namely file-sharing, as well as some deep discounting. The music, video and games retailer, which operates the FYE brand mostly in mall locations, plus the freestanding Coconuts, Strawberries Music, Wherehouse, CD World, Spec's, Second Spin and Planet Music brands, has launched aggressively into e-commerce sites, and has also ventured into the download business.

"In October, we took a major step in our digital strategy with the launch of the FYE Download Zone, a digital music service that will link the online and in-store experience," according to Higgins.

The just-announced holiday season results come on the heels of a Q3 ended October 30, 2004 that saw a slight gain in total sales to $270 million from $268.5 million a year earlier, and a net loss of $4.6 million compared to $5.9 million a year earlier. Those results included an extraordinary gain related to TWEC's acquisition of Wherehouse out of bankruptcy in late 2003. Most of the 80-store cutback from a year ago comes from the disposition of weaker Wherehouse locations.

For Q3, "we were able to deliver a better bottom line performance year over year through improved gross margins," according to Higgins, who admits that the sale of games has done better than music and videos.

"Based on our sales performance during the holiday period, we are maintaining our 2004 earnings per share projections of between $1.02 and $1.07 per share," Higgins told analysts yesterday.