Tweeter Home Entertainment Group, Inc. announced sales results and expected earnings for its second fiscal quarter ended March 31, 2004.
The consumer electronics retailer reported that total revenue increased 4 percent from U.S. $182 million to $189 million compared to the same period last year, while comparable store sales increased 3 percent.
Jeffrey Stone, president and CEO, stated, "It feels good to once again have a positive comp quarter under our belts. We believe that comps could actually have been higher but we made a strategic decision to eliminate a private customer sales event in February."
Joseph McGuire, senior vice president and CFO, added, "Supply chain initiatives are starting to be ingrained in our culture and resulted in approximately 35 basis points of improvement in turns for the comparable quarter. Our in-stock percentage is up over 85 percent for the second consecutive quarter, and discontinued inventory represents approximately 10 percent of overall inventory. Discontinued inventory greater than 180 days old is the lowest it has been in several years."
Mr. McGuire said that Tweeter expects inventory to finish at approximately $124 million, down from $144 million last year and that outstanding debt dropped to $46.9 million from $67.9 million at the same time last year.
"We expect to beat plan slightly on the expense side, but television is still the business driver and as a result, gross margin was less than plan, due to both mix and rate," stated Mr. McGuire. "While we are working on attachment strategies to offset the margin loss, the results of those strategies are not yet mature, and we expect a loss in the range of $(0.05) to $(0.08) per share for the quarter."
The retailer said the expected loss of $(0.05) to $(0.08), however, excludes the non-cash charge for warrants issued to RetailMasters in January 2004. The valuation charge for these warrants is $5.1 million, or approximately $0.21 per share. Including the non-cash charge for these warrants, the expected loss will be in the range of $(0.26) to $(0.29).
The company plans to release earnings for the quarter on April 27.
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