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Harvey Reports Slightly Lower Sales

3/18/2004 02:53:00 PM Eastern

Lyndhurst, N.J. — Digital video products continue to drive the consumer electronics business at Harvey Electronics, but sales for its fiscal first quarter were down $600,000.

The retailer’s first quarter, ended Jan. 31, included 13 weeks, had sales of $12.4 million, compared with the $13 million reported for the 14-week fiscal first quarter in the year-ago period.

Net income in the first three months hit $350,288, down from the $420,643 reported in the same quarter a year ago. This still includes a comparison of a 13-week quarter this year vs. a 14-week period the previous year.

Gross profit margin in the first three months decreased only slightly to 40.3 percent, from 40.5 percent in the same three months last year, despite the retailer’s continuing shift in business to video products, which generally produce lower margins. Video products held a 50 percent share of net sales in the first quarter, compared with 45 percent year-on-year.

The reduction in margin resulting from the shift to video products has been partially offset by sales of higher margin home theater components, including accessories, furniture, cable and extended warranties, said Harvey.

Custom installation remains big business for Harvey, with the total for both equipment sales and labor income rising about 14 percent in the first quarter. The custom installation business now accounts for 56 percent of the retailer’s net sales. This increase climbed to nearly $7 million in the first three months, compared with $6.1 million year-over-year or 47 percent of net sales. "As a result, custom installation services have been and will continue to be a focus for management," said Franklin Karp, president.

Harvey reported a comparative quarterly expense increase of 2.4 percent in the first three months, or $101,000, compared with the first quarter a year earlier.