San Francisco — Specialty consumer electronics retailer Good Guys said net income for its five-month transitional reporting period increased 15 percent to $1.3 million, up from $1.1 million in the same five months of the previous year. Excluding a one-time gain recorded in the year-ago period, net income increased by $1.2 million.
As previously reported, net sales for the five months ended Feb. 28 increased 6 percent to $415 million, compared with the $391.5 million registered in the same period a year ago. Comp-store sales also were up 6 percent in the five months.
"Our renewed focus on the top-half of the consumer electronics market and ongoing efforts to reduce costs have allowed Good Guys to increase earnings and achieve above-average sales increases at healthy margins, even in the face of a challenging economic climate," said Ron Unkefer, chairman/CEO.
Gross profit margin for the five months was in line with expectations, albeit somewhat lower than the previous year. This hit 28.1 percent, down 180 basis points from the 29.9 percent achieved in the year-ago five months. This drop reflects the promotional holiday selling environment, stronger sales of video products and the retailer's efforts to regain market share during the period.
Selling, general & administrative expenses benefited from the company's cost-control program, hitting 25.8 percent for the five months, 190 basis points better than the 27.7 percent registered in the year-ago period.
Looking ahead, Good Guys expects minimal sales growth in the first half, due to softness in the economy. However, it said fiscal 2002 should mark the chain's first full year of profitability since 1995. Sales during the next 12 months are expected to steadily increase as the economy improves — ramping up to mid-single-digit sales growth by the fourth quarter, the company said.
Good Guys has changed its fiscal year to begin on March 1 in order to coincide with other major publicly traded CE retailers, thus allowing for more realistic comparisons. The retailer's first complete fiscal year under the new reporting calendar, fiscal 2002, began this past March 1.