San Francisco - Impacted by the ongoing effect of a challenging economic environment — as evidenced by lower sales volume and declining store traffic during the first half of the year — high end specialty retailer Good Guys reported a dramatically widening net loss in its fiscal second quarter.
The chain reported a $6.9 million loss for the period, compared with a loss of $1.8 million in the same three months a year ago.
At the same time, Good Guys and retailer CompUSA reached an agreement, whereby CompUSA would acquire the 71-store CE chain for about $55 million in cash.
In its second quarter, as reported, Good Guys recorded declining sales of $152.2 million, down about 15 percent from the $177.5 million reported in the year-ago period. Comp-store sales dropped 13 percent.
Gross profit margin in the second quarter declined 180 basis points, down to 26.8 percent, from 28.6 percent in the same three months in 2002.
Commenting on Good Guys lowered numbers, Ken Weller, chairman/CEO, said, 'Despite these challenges, Good Guys has taken decisive actions to prepare for the holiday selling season. We believe our performance in the second half of the year will reflect the results of the company-wide efforts to bring more qualified customers to our stores, differentiate the customer experience and better align our sales, marketing and merchandising functions.'
For the six months, Good Guys reported a net loss of $15.3 million, compared with a loss of $6.4 million in the year-ago period.
Sales for the six months hit $295.5 million, down about 15 percent from the $348.5 million recorded in the first half of the previous fiscal year.
Comp-store sales for the six months slid 13 percent.
Gross profit margin for the first half reached 27.2 percent, 150 basis points below the 28.7 percent recorded in the first six months of last year.
However, Good Guys did reduce expenses for the six months by more than $10 million, a decline of nearly 11 percent over the same period a year ago.