NEW YORK – Amazon.com’s retail, hardware and
content investments, and a carrier transition at
RadioShack, were but some of the changes that
altered quarterly financial reports for CE-related
retailers, while expanding hhgregg scored a double-
That’s just a few of the highlights of publicly held
retailers’ financials released recently.
Amazon.com said third-quarter profits fell 73 percent
to $63 million and projected as much as a 142
percent decline in fourth-quarter operating income
as the e-tailer ramps up investments in infrastructure
and capacity, the launch of four Kindle models and its
digital content business.
Third-quarter net sales rose 44 percent to $10.9
billion, while net sales in North America rose 44
percent to $5.9 billion and operating income fell 23
percent to $144 million for the three months, ended
Sept. 30. Sales of electronics and other general merchandise
rose 56 percent in North America to $3.6
billion, and sales of media increased 21 percent to
hhgregg reported higher sales and lower relative
costs, which helped drive a 53.8 percent increase in
second-quarter net income, to $6 million.
Net sales for the three months, ended Sept. 30,
rose 28.6 percent to $618.6 million due to the net
addition of 35 new stores over the trailing 12 months,
while comp-store sales edged up 1.5 percent on
strength in major appliances and computers which
were partially offset by declines in video.
President/CEO Dennis May said the solid results
show strategic initiatives, including a new e-commerce
site, the rollout of tablets, an added emphasis
on majaps and continued new store expansion, began
to gain traction in the quarter.
Looking ahead, hhgregg said it is on track to open
a total of 35 new stores during its current fiscal year
which ends in March 2012, and plans to add 20 to 25
more stores over the following 12 months.
Office Depot’s third quarter in its North American
retail division recorded net sales of $1.2 billion,
down 4 percent, reflecting the closing of Canada
stores, and comp-store sales decreased 2 percent
due to weakness in computers and related products.
Comp sales were strongest in tech support and office
supplies. North American operating profit rose
40 percent to $42 million thanks to gross margin improvements
from a higher sales mix of supplies vs.
CE products, as well as better management of pricing
and promotions and lower property costs.
OfficeMax reported lower retail segment sales
in its fiscal third quarter, ended Sept. 24. Sales decreased
4.8 percent to $891.5 million year on year,
compared with the third quarter of 2010, reflecting a
same-store sales decrease of 4.3 percent. A decline
in same-store sales in the U.S. was partially offset by
stronger same-store sales in Mexico. Retail segment
income was $28.5 million in the quarter, compared
with $32.4 million in the prior year’s third quarter.
RadioShack said third-quarter sales and earnings
were impacted by its September split from T-Mobile.
Profits fell 99 percent to $300,000, net sales rose 3
percent to $1 billion, and comp-store sales slipped 4
percent for the three months, ended Sept. 30.
The mid-September carrier transition, from TMobile
to Verizon, cost the chain $23.4 million, plus
another $400,000 in T-Mobile inventory adjustments
and costs related to a plant closing in China. Excluding
these one-time items, net income would have
fallen 67 percent to $14.9 million.
Systemax, whose primary retail brands are Tiger-
Direct, CompUSA and Circuit City, reported higher
net income and sales corporately, but lower consumer
sales during the third quarter, ended Sept. 30.
Sales were $901.2 million in the quarter, up from
the prior year’s $862.7 million. Net income was
$10.6 million, up from the prior year’s $8.6 million
Consumer sales fell to $393.0 million in the quarter
from the prior year’s $427.5 million.
By product category computer sales were $280.7
million for the quarter, up from the prior year’s $221.9
million. Computer accessories and software were
also up, by almost $10 million, to $247.5 million.
But CE product sales were down $22 million in the
quarter to $167 million compared with the prior year.
– Additional reporting by Alan Wolf.