Canton, Mass. - Tweeter Home Entertainment Group said it grew its flat panel sales to 11.6 percent of revenue in the company's fiscal first quarter, but the retailer's business as a whole took it on the chin.
For the first three months, ending Dec. 31, with total revenue decreasing 0.9 percent, to $250 million, from $252 million in the year-ago period. Net income for the first quarter dropped to $5.2 million, from $13.5 million in the same three months in 2001. Comp-store sales declined 10.4 percent in the quarter, excluding the two-unit Hillcrest chain, acquired last March.
These results took place despite high definition and HD-ready TV sets driving the plus side of its business, and flat panel television moving to center stage, the company reported.
'Our short- to mid-term goal is to run the business for profitability and forego store growth in favor of continuing to reduce our debt,' said Jeffrey Stone, president/CEO.
Tweeter's income from operations nose-dived to $9.1 million in the first three months, down from $23 million in the same quarter the previous year.
As a percentage of revenue, operating income in the first quarter decreased to 3.6 percent, from 9.1 percent year over year. This was due to a 340 basis point increase in selling expenses as well as a 160 basis point decline in gross margin, to 34.9 percent. The large increase in selling expenses as a percent of revenue was primarily attributable to missing its sales plan by almost $37 million, said Tweeter.