Systemax Posts Lower Profits, Sales In 2nd Qtr.

By Alan Wolf -- TWICE, 8/24/2009

Port Washington, N.Y. — Systemax reported a 52 percent drop in second-quarter net earnings, to $6.5 million, for the three months ending June 30.

Net sales for the company which makes computers, parts and peripherals and sells them through its Circuit City, CompUSA and TigerDirect retail operations, slipped 4.6 percent to $721.6 million, but edged up 1.4 percent excluding the impact of currency fluctuations.

Technology product sales in North America grew nearly 11 percent to $498.3 million, but fell 29 percent in Europe to $173.7 million.

Retail sales grew more than 18 percent to $387.4 million, while comparable channel sales increased 15.4 percent, the company said.

“While economic and industry conditions remain challenging, we are successfully growing our consumer business — both brick-and-mortar and online — as evidenced by our strong 'same-store' retail sales growth,” said Gilbert Fiorentino, chief executive of Systemax's technology products group.

He said the unit's strategic positioning as “a price-competitive retailer with a strong focus on customer service” is connecting with consumers and helping it grow market share.

While sales from the recently relaunched CircuitCity.com were not material during the quarter, the site saw steady increases in traffic, and the company will continue to develop the property by adding new features, product categories and ad campaigns, he said.

Fiorentino added that Systemax remains focused on cutting expenses and improving the bottom line, and will continue to grow the business through select acquisitions, such as the Circuit City brand and WStore Europe, a European supplier of IT products for the business channel. Such acquisitions “offer opportunities to grow market share as well as enable us to leverage our experience in multichannel marketing of computers and consumer electronics and our established back-end and distribution infrastructure,” he said.