Numbers Up for Harvey, Tweeter; Good Guys Stagnant
On July 19, Harvey Electronics, Inc. announced increased sales for the month ended June 23, 2001 and for the previous eight months. For the month, net sales amounted to $2.6 million, a 15.7% increase over the same month last year. For the eight months ended June 23, net sales totaled $26 million, an increase of approximately $5 million, or 12.8%, over the same period last year. Comparable store sales for the month increased by about 1.1% from the same month last year; for the eight months ended June 23, sales increased approximately $1.8 million, or 7.8%.
The opening of a new store in Eatontown, New Jersey has boosted Harvey's numbers, said company president Franklin Karp. "The early sales results of our newest Harvey have exceeded our expectations," Karp stated. "Customer feedback and satisfaction have been excellent. We are very excited about the prospects for this beautiful new showroom in Monmouth County.'' Net sales for the first two months of Harvey's third quarter of fiscal 2001 were up by $686,000, or 14.9%, from the same period last year. Comparable store sales were up 2.3% for this same period.
National retail chain the Tweeter Group also reports good results. The company has been on an ambitious acquisition campaign for several years now, adding smaller regional operations to its roster every few months. For the quarter ended June 30, Tweeter reported that total revenue increased 17.7% to $110.0 million, up from $93.5 million in the same period last year. Excluding the recently-acquired Douglas TV, Big Screen City, and Audio Video Systems chains, Tweeter's comparable store sales decreased 0.6%, but net income for the quarter increased 18.3% to $2.5 million from $2.1 million for the same period last year. The company's expansion resulted in a 35.8% increase in income from operations, currently $3.8 million as compared to $2.8 million in the same period last year. Overall gross margin increased slightly, to 36.4% from 36.3% for the same quarter last year.
Tweeter claims that labor revenue from the home installation business and higher margins on digital and new technology products are major contributors to the positive financial picture. Echoing industry-wide statistics released by the Consumer Electronics Association, Tweeter is doing a strong business in digital video products, whose lower margins are somewhat offset by higher sales volume. "The digital engine that is driving the consumer electronics industry continues to gain momentum," said CEO Jeffery Stone. "We achieved our highest level of digital penetration ever in both projection televisions, with 89% of the category, and also tube televisions, with 52% of the category, . . . We believe that emerging television display technologies, including HDTV, plasma, and DLP, will be the fastest growing category over the next several years."
Tweeter CFO Joe McGuire said his company "finished the quarter more than $6 million ahead of plan,'' adding "We are still being cautious about the economy and as a result, we have planned for comparable store sales gains in the range of 0% to 2%, with an earnings per share estimate of $0.19 to $0.20 for our fourth quarter, ending September 30, 2001."
San Francisco–based Good Guys is a dark cloud in an otherwise sunny retailing picture. Good Guys reported a net loss of $10.1 million for the first quarter, compared to a net loss of $8.7 million for the same period last year. Net sales declined 7%, with gross profit margin up slightly, 28.4% against 28.2% in 2000. The company managed to decrease expenses by $1.5 million in the interim.
The energy crisis in California has inhibited sales of electronics, according to some reports. In addition, the SF Bay Area is still reeling from the collapse of the dot-com bubble that propelled it through three years of unprecedented prosperity. "Although the current economic environment has slowed our financial progress in the near-term, Good Guys continues to make significant strides toward returning to sustainable annual profitability, as demonstrated by our healthy gross profit margins, steady reductions in general and administrative expenses, and improved cash position . . . . Sales of digital and high-tech products have continued to be strong despite the negative retail environment," said company founder and CEO Ronald A. Unkefer. "We expect measurable improvement to our bottom line to be evident in the second and third quarters and [expect] to achieve profitability for fiscal 2002 in the fourth quarter." Good Guys operates 79 stores on the West Coast and in a number of western states.