Battered by declining sales in under-performing stores, Good Guys reported a net loss of $17.3 million in its fiscal fourth quarter, ended Feb. 28, compared with net income of $6.8 million in the year-ago period.
The fourth-quarter net loss includes an accounting reserve of $18.1 million, which recognizes potential costs associated with the retailer's store closing plans, among others.
Good Guys reported a 6.7 percent decline in net sales in the fourth quarter, which hit $259.2 million, down from $277.8 million year over year. Comp-store sales declined 7 percent.
The retailer said it has received a four-year extension of its three-year $100 million credit facility, extending through May 2006.
On the bright side, Good Guys improved its gross margin in the fourth quarter by 40 basis points, to 28.6 percent, reflecting a continued focus on more fully featured, higher end entertainment electronics, lower promotional expenses and reduced distribution costs.
For the 12 months, Good Guys sales declined 6.2 percent, to $819.7 million, down from $873.9 million the previous year. Comp-store sales dropped 7 percent for the year. The retailer extended its net loss to $40 million, more than double the $17.2 million loss reported in the previous 12 months.
Looking ahead to the first quarter, ending May 31, Good Guys expects to report positive comp-store sales and an improved financial performance.