Harvey Reports Fiscal Q2 Profit
By Jeff Malester -- TWICE, 6/21/2004
LYNDHURST, N.J.— High-end home-theater products retailer Harvey Electronics moved into the black in its fiscal second quarter, recording net income of $85,090 compared with a net loss in the year-ago period of $48,636.
As previously announced, second quarter sales increased 4.9 percent, hitting $10.3 million, up from $9.9 million in the year-ago period. Comp-store sales climbed 5.6 percent.
Gross profit margin for the second quarter, ended May 1, jumped to 42.3 percent from 40.6 percent, due mainly to Harvey's efforts to revive its higher margin audio business with in-store demonstrations, and by bundling these audio products with its video offerings. The retailer, which said it has enjoyed a resurgence in its audio business in the second quarter, also benefited from higher margin sales of labor, accessories, furniture, cable and extended warranties.
As for expenses, Harvey noted first half figures have increased 3.7 percent, or about $300,000.
"Our comparable store sales increases, the increase in our pre-tax income and strong gross profit margin for the first half have been very gratifying, supporting the success of our business plan," said Franklin Karp, president.
"We also believe Harvey continues to differentiate itself with … sophisticated custom installation capabilities. These profitable custom installation services, coupled with the strong demand for the digital video and home theater products has continued to drive and improve our business and our results," said Karp.
Custom installation sales, including both labor income and equipment sales increased about 10.5 percent in the first half, and represented about 58 perent of Harvey net sales in this period.
For the six months, sales essentially were flat, at $22.7 million, compared with $22.9 million year-on-year. Comp-store sales rose about 3.6 percent, or $800,000.
Net income climbed about 17 percent, to $435,378 in the first half, compared with $372,007 in the same six months last year. Gross profit margin for the first half increased to 41.2 percent, compared with 40.6 percent year-over year.
Harvey said its fiscal first quarter this year included a 13-week reporting period, compared with 14 weeks in 2003.
