High-end consumer electronics retailer Good Guys widened its net loss in its fiscal first quarter to $10.1 million, up from $8.7 million in the same three months in 2000.
The increase in the net loss resulted from a 7 percent drop in net sales, reported earlier (TWICE, June 11, p. 1), down to $171.5 million in the period, from $184.1 million the previous year.
A decline of 8 percent in comp-store sales in the fiscal first quarter ended May 31 was attributed to industry-wide softening in demand for CE and California's energy crisis.
Gross profit margin in the first quarter rose 20 basis points to 28.4 percent, compared with 28.2 percent in the same three months last year. Selling, general and administrative (SG&A) expenses decreased by more than $1.5 million.
Sales of digital and high-tech products remain strong despite the negative retail environment, said Good Guys.
Good Guys said it anticipates that negative sales trends may continue through the third quarter. Assuming an improvement in the economy, incremental sales opportunities from new product introductions and other planned initiatives are expected to result in single-digit sales growth for the fourth quarter and flat sales growth for the fiscal year.
"Good Guys continues to make significant strides toward returning to sustainable annual profitability, as demonstrated by our healthy gross profit margins, steady reductions in SG&A and improved cash position," said Ronald A. Unkefer, chairman/CEO.
"We expect measurable improvement to our bottom line to be evident in the second and third quarters, and to achieve profitability for fiscal 2002 in the fourth quarter," Unkefer said.