Tweeter Group Revenue Rises 55%
On November 21, the electronics retailer reported a 55.2% increase in total revenue for its fourth fiscal quarter, ended September 30. Citing huge demand for digital products, the Canton, MA–based electronics chain reported that fourth-quarter revenue hit $150.3 million, compared to $96.9 million for the same period a year earlier.
The company's quarterly net income declined, however, by a whopping 76%, thanks primarily to a $1.2 million write-off of its Cyberian Outpost investment, and slightly due to increased administrative and promotional costs. Tweeter's 2001 fourth-quarter net income was $847,000, compared to $3.5 million for the same period last year.
Tweeter revenue for the year grew 35.1%, to a total of $540.1 million, from $399.9 million the previous year, thanks to an ongoing expansion and acquisition program. Net income for the year, however, increased by only 2.7%—or $16.9 million this year compared to $16.4 million last year.
Most comparable-store results throughout the Tweeter empire were down due to a consumer pullback in the aftermath of the terrorist attacks of September 11, a pullback that may continue through the winter holiday season, typically the most profitable time of year for electronics retailers. Tweeter executives feel confident that they can ride out any downturn.
"Given the nature of the second half of the year and the economic and world events that occurred in our fourth quarter, we feel pretty good about the year's profitability," commented CEO Jeffery Stone, who attributed his company's good fortune to anticipating a surge in demand for digital products. The digital product category grew from 31.3% of Tweeter's product mix in the fourth quarter of 2000 to 43.3% of the total for the same period this year. "The evolution to digital from analog is going to happen regardless of the economy," Stone explained. Convinced of the solidity of the overall economy, the Tweeter Group plans to build or acquire 16 new stores and relocate four others in 2002. The company has committed $22 million toward the project, about half of its estimated total expenditures for the coming year.