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WEST CHESTER, PA. -After taking it on the chin due to unavailability of PlayStation2 hardware, software and accessories; softness in sales of Pokemon trading cards and toys; and poor sales results for several new PC game titles, Electronics Boutique posted a comp-store sales decrease of 16.8 percent in the fiscal third quarter ended Oct. 28. This compares with a comp-store sales increase of 37.5 percent in last year's third quarter.
The specialty electronic games and accessories retailer recorded total revenue of $158.6 million for the three months, down 10 percent from the $177.4 million registered in third-quarter 1999. The company reported net income of $1.4 million, compared with $3.9 million in the year-ago third quarter.
Gross margin on sales, however, was nearly even from quarter to quarter at 22.9 percent. The negative impact on gross margin of lower sales of higher margin Pokemon-related products was offset by a higher margin on video game sales, compared with the prior year, and lower sales of lower-margin video game hardware.
"The robust demand we are seeing for PlayStation2 and the strong-tie ratios of software and accessories sales we have experienced bodes well for the future," said Joseph J. Firestone, president/CEO. "We are continuing to quickly sell through our allocations of PlayStation2 and anticipate vigorous growth in this category."
For the first nine months, total revenues increased 5.2 percent to $435.5 million, compared with $414.1 million in the third quarter of 1999. Net income dropped substantially, however, hitting $1.8 million in the nine months, compared with $7.3 million in the year-ago nine months.
Electronics Boutique noted an ongoing positive trend in its e-commerce division, called EBWorld.com. Here, revenue grew substantially and losses continued to decline. In the third quarter, net losses were $100,000, bringing the year-to-date losses to $1.6 million.
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