Canton, Mass. - Hitching its financial boxcars to the digital engine that is driving the consumer electronics industry, mid- to high-end A/V specialty retailer Tweeter Home Entertainment Group said it enjoyed an 18.3 percent increase in net income in its fiscal third quarter.
Net reached $2.5 million, compared with $2.1 million in the year-ago period.
Tweeter's operating income climbed 35.8 percent to $3.8 million in the fiscal third quarter ended June 30, up from $2.8 million in the same three months in 2000. Overall gross margin increased 10 basis points, to 36.4 percent in the second three months, compared with 36.3 percent a year ago. At the same time, selling expenses as a percentage of revenue decreased 40 basis points in the second quarter, to 27.2 percent, from 27.6 percent in the year-ago three months.
'Although our business is not as robust as it was last year at this time, the business that we are doing is profitable,' said Jeffrey Stone, president/CEO. 'Retail gross margins remain strong, and the continuing leverage from our overall sales gains helped us to maintain our very high level of profitability.'
Speaking about the hard-driving digital engine, Stone said Tweeter achieved its highest level of digital penetration ever in both projection TVs, 89 percent of the category, and tube TVs, 52 percent of the category. 'The emerging TV display technologies, including HDTV, plasma and DLP will be the fastest growing category over the next several years,' he said.
Total revenue rose 17.7 percent to $110 million in the third quarter, compared with $93.5 million in the year-ago period. Comp-store sales, however, were off 0.6 percent, excluding the Douglas TV, Big Screen City and Audio Video Systems chains. The chain is planning for comp-store gains in the range of flat to 2 percent for its fourth quarter.
For the nine months, net income hit $16 million, up from $12.9 million in the same period last year. Total revenue jumped to $389.8 million, compared with $303.1 million in the year-ago nine months.