Tweeter's Sales Soar 18 Percent, But Comps Flat
By Alan Wolf -- TWICE, 7/9/2001
CANTON, MASS.— Boosted by the buyouts of Douglas TV, Big Screen City and Audio Video Systems, fiscal third quarter sales for Tweeter Home Entertainment Group rose 17.8 percent to $110.1 million.
But minus the accretive impact of the dealer acquisitions, comparable store sales dipped 0.6 percent for the period ended June 30.
Despite the downturn, president and CEO Jeff Stone said he was satisfied with the specialty chain's results, given last year's hard-to-beat 20.5 percent comps. "It feels a bit odd to be pleased about almost flat comps, but given the reports coming out of some other companies and the change in the economic mood of the country, we are indeed happy with our performance," he said.
He added that same store sales had returned to the plus column for the month of June.
Stone said that digital products continued to be a key sales driver throughout the quarter, representing a record 43.2 percent of all sales for the period. Digital TVs in particular accounted for 89.3 percent of projection sales, 51.5 percent of tube sales and 73.9 percent of total television sales.
Chief financial officer Joe McGuire noted that third quarter sales of projection sets rose 16.2 percent and tube TVs grew 29 percent during the quarter, while plasma sets proved to be the fastest growing category overall with 72.3 percent growth. McGuire added that "emerging television display technologies like plasma and DLP will be the fastest growing category over the next several years."
Stone described custom install as another significant high-margin growth area for Tweeter, which is grooming that business for a "convergent future" and will double the number of dedicated installation staff to 242 over the next 12 months.
But the biggest growth engine for the upmarket chain remains acquisitions, for which the pipeline "is still very active," Stone said. "We are having several conversations with other specialty retailers about the possibilities of a merger."
McGuire added that its latest play, the acquisition of Sound Advice, will not be reviewed by the Securities and Exchange Commission, clearing the way for an expected Aug. 1 close.
