By Jeff Malester & Alan Wolf
Canton, Mass. -- Tweeter Home Entertainment Group reported that its sales rocketed nearly 60 percent to $95.3 million during its fiscal third quarter ended June 30, and comp-store net jumped more than 20 percent for the period.
In reporting the numbers, president/CEO Jeff Stone also announced that the company's Dow Stereo/Video and Home Entertainment chains would assume the Tweeter name later this month.
The name changes, which were preceded by local marketing campaigns, will become effective July 17, according to Bernie Sapienza, Tweeter's VP/merchandising and purchasing.
Sapienza told TWICE that the effort represented the first step toward a possible systemwide conversion to the Tweeter brand, and that Dow and Home Entertainment were chosen as the test chains thanks to their relatively limited volume and the company's expansion plans for both. Moreover, Tweeter wants to move away from Dow's "low-end image," he said, while the Home Entertainment moniker fails to address other parts of Tweeter's business, such as mobile electronics.
Tweeter shares rose 7 percent to 30 3/16 on news of the sales gains, which the company said were fueled by new technology products.
Specifically, projection TV sales were up 72.8 percent for the period, with HDTV and HD-ready projection sets accounting for 59.1 percent of projection sales. Sales of digital and digital-ready projection sets climbed to 2,483 units from 786 sets sold during the year-ago period, which represents 8.9 percent of total revenue for the quarter, up from 3.1 percent last year.
DVD represented 5.1 percent of Tweeter's sales for the three months, up from 4.4 percent last year, while tube TV sales rose 5.8 percent due in part to the introduction of digital tubes. Digital tubes accounted for 6.6 percent of all tube sales for the three months.
The comp-store numbers exclude the Dow and United Audio Centers chains, both of which were acquired in the past 12 months. The two acquisitions were accounted for as purchases.
For the third quarter, Dow stores had a total comp-store sales decrease of 11.5 percent, compared to a similar period the previous year, while the United Audio Center stores had a comp-store sales increase of less than 1 percent.
Stone said that Dow is performing to plan and will continue the "intelligent" loss of sales in its San Diego market as it abandons the entry-level customer and moves the product mix and customer base to the core Tweeter model. He expects Dow to begin posting flat-to-positive comps for the holiday selling season.
As for Chicago's United Audio, acquired April 1, he said, "We are very pleased with its performance. It has been the smoothest transition we have ever done."