Lyndhurst, N.J. - Boasting significant increases in sales and profit during its fiscal third quarter, specialty retailer Harvey Electronics reported its business has been driven by strong demand for custom installation services and for flat-panel plasma and LCD televisions, DVD and home theater products.
Sales in the third quarter hit $9.6 million, an 8.4 percent jump from the third quarter of 2001 when the retailer reported $8.8 million in sales. Comp-store sales for the three months rose 8.5 percent.
Net loss for the third quarter was reduced to $80,923, down 81 percent from a net loss of $421,758 in the same quarter last year.
'Customer demand continues to increase for the exciting new digital video and home theater products we sell,' said Franklin Karp, president. 'We believe our results should continue to improve.'
Gross margin for the third quarter, ended July 27, jumped 140 basis points, to 39.5 percent, up from 38.1 percent in the same three months last year. Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) for the third quarter increased 226 percent, reaching $189,000, up from a negative EBITDA of $150,000 in the same three months in 2001.
'Our comp-store sales increases, impressive gross margin and strict control over our expenses has also benefited our overall profitability,' said Karp.
Installation sales of equipment and labor now account for 50 percent of Harvey's business, or about $16.3 of net sales for the first nine months, compared with 42 percent, or about $11.4 million in the same nine months last year - an increase of about 43 percent.
Overall sales for the nine months hit $32.4 million, a 9.6 percent increase over the $29.5 million reported in the year-ago period. Comp-store sales increased 3.3 percent for the nine months.
Net income for the nine months climbed 262 percent, hitting $400,134, compared with a net loss of $246,589 in the same period a year ago. Gross margin for the nine months rose 70 basis points, to 39.5 percent. EBITDA for the nine months increased 131 percent, to $1.6 million, compared with an EBITDA of $705,000 for the same nine months in 2001.
Looking ahead, Harvey said it has no plans to open any new stores in the remainder of fiscal 2002. Expansion plans for the following year have not been developed due to the continued economic uncertainty, the retailer said. Harvey reported it will continue to focus efforts on store profitability and augmenting its growing custom installation business in the coming months.