British music, DVD, games and books retailer HMV said it would meet full-year profit forecasts, with better margins and tight cost control offsetting a sharp fall in fourth-quarter sales.
The group, which runs over 400 stores under its own name as well as 313 Waterstone's bookstores, also said that a strong summer release schedule gave it confidence that sales trends would improve.
'Prospects for the entertainment markets going into the new financial year are more encouraging,' CEO Simon Fox said.
He said sci-fi epic Avatar, released on Blu-ray and DVD this week, was expected to be one of the biggest selling films of the year, while forthcoming releases included Sherlock Holmes, Alice in Wonderland and Toy Story 3.
Fox said the music roster was also strong, with Robbie Williams, Duffy, Cheryl Cole and Amy Winehouse all releasing albums, while in games, this year sees the release of new motion sensor controllers plus related software for the major consoles.
The firm said sales at HMV stores in the UK and Ireland open over a year fell 13.2% in the 16 weeks to April 24, having been up 1.4% in the 10 weeks to January 2.
HMV, which faces the same competition from supermarkets, online retailers and digital downloading that caused rivals Woolworths, Zavvi and Borders UK to fall during the recession, has responded by cutting costs and widening its focus.
Last month the firm said it was targeting earnings growth over the medium term by increasing sales of new products in music, visual and games and raising its presence in live music and ticketing.
Fox blamed tough comparative numbers, reduced levels of promotional activity and severe weather at the start of the period for the recent sales slump.
He attributed 3-4% of the sales fall to a particularly tough games market, down over 20% year-on-year.
Underlying sales at Waterstone's fell 4.8%,an improvement on its Christmas performance, reflecting the initial impact of new management and turnaroundinitiatives.
