The 32-year-old, locally based subsidiary of London-based Rank Group PLC posted profit of $41.7 million, a 23.5% drop from $54.5 million in fiscal 2001. But industry analysts say the company's operating profit margin of 11.4% is still in the 10% to 20% range most businesses target.

Total sales of $365.8 million, up 2.6%, topped the $356.4 million booked in the previous year. Merchandise sales specifically were down 8.2%.

The company confirms it plans no new cafes this year but is moving ahead with new joint hotel and casino development plans. In Choctaw, MS, the 15,000-employee company is teaming with the Mississippi Band of Choctaw Indians to open its first Hard Rock Beach Club and a separate 300-room Hard Rock Hotel in an estimated $100 million venture. Hard Rock will own the Beach Club and the tribe will own the hotel when it opens at the Indians' Pearl River Resort in Choctaw.