Electronics Boutique Fiscal Q1 Comp Sales Rise 14%

WEST CHESTER, PA. — Comp-store sales, primarily driven by positive sales strength derived from Sony PlayStation 2 hardware, software and accessories, registered a strong 14.3 percent increase at Electronics Boutique during the specialty retailer's fiscal first quarter.

Revenues for the fiscal first quarter ended May 5 increased 18.7 percent to $179.9 million, compared with $151.5 million in the year-ago first quarter. However, the retailer reported a net loss of $1.4 million for the three months, compared with income of $2.4 million in the same quarter in 2000.

Electronics Boutique — which is dedicated exclusively to sales of video game hardware and software, personal computer entertainment, PC productivity and educational software and accessories — said cost of goods sold as a percentage of net sales increased 2.2 percent in the first quarter. This was primarily due to increased sales of lower margin video game hardware and lower sales of higher margin Pokemon products.

Selling, general and administrative (SG&A) expenses for the first quarter was 22.2 percent of total revenues, 100 basis points higher than the same quarter last year.

The company, which expects to open 175 new stores worldwide in fiscal 2002, said it is looking for second-quarter sales to increase to about $156 million, compared with the same period last year. Cost of goods sold as a percentage of net sales for the second quarter is expected to improve by about 150 basis points over the first quarter of fiscal 2002. SG&A expenses as a percentage of total revenues in the second quarter should be similar to the year-ago three months.

For fiscal 2002, Electronics Boutique expects improved profitability over the prior year as a result of a strong second half. Sales for the year are expected to increase about 30 percent to $1 billion.