Tweeter Sales Up In Q4, But Net Decreases
By Jeff Malester -- TWICE, 12/3/2001
Canton, Mass. — Spearheaded by digital technology-based products, Tweeter Home Entertainment Group registered a 55.2 percent gain in total revenue for the fiscal fourth quarter, reaching $150.3 million, compared with $96.9 million in the year-ago period. All digital products, as a percentage of Tweeter's product mix, grew to 43.3 percent of total revenue in the fourth quarter, compared with 31.3 percent in the same three months in 2000.
Comp-store sales, excluding the Sound Advice, Audio Video Systems, Big Screen City and Douglas TV chains, decreased 1.9 percent during the fourth quarter.
Net income in the fourth quarter ended Sept. 30, however, took a big hit, dropping 76 percent, to $847,000, down from $3.5 million in the year-ago period. Tweeter's write-down in its investment in Cyberian Outpost resulted in a $1.2 million charge in the fourth quarter.
Gross margin decreased 170 basis points during the fourth quarter, hitting 36.3 percent, compared with 38 percent in the same quarter in 2000.
SG&A also took a hit in the fourth quarter. General and administrative expenses as a percent of revenue climbed 60 basis points to 5.9 percent, compared with 5.3 percent last year, while selling expenses as a percent of revenue increased 100 basis points to 28 percent, compared with 27 percent in the same three months last year.
For the fiscal year, Tweeter revenue increased 35.1 percent, to $540.1 million, up from $399.9 million in the year-ago period. Comp-store sales for the 12 months, minus the recently annexed chains, decreased 0.6 percent. Net income increased 2.7 percent, reaching $16.9 million, compared with $16.4 million in the prior fiscal year.
"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," said Jeff Stone, president/CEO. "The evolution to digital from analog is going to happen regardless of the economy," Stone said.
Tweeter sales have picked up since the end of September/early October, said Joe McGuire, chief financial officer. Through Nov. 18, current quarter comps are about a negative 2 percent, said McGuire. For the December quarter, he expects comp-store sales to be in the range of flat to negative 4 percent.
Tweeter said it expects capital spending in fiscal 2002 to be about $45 million. Of this amount, the retailer forecasts expenditures at about $22 million on 16 new stores and four relocations.
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