San Francisco - Good Guys took a substantial chunk out of its negative earnings figures, reducing its net loss to $8.1 million in its fiscal third quarter, down from a net loss of $11.9 million in the same three months last year.
Also on the bright side, Good Guys improved its gross profit margin 140 basis points in the third quarter ending Nov. 30, hitting 28.3 percent, up from 26.9 percent in the year-ago period. The retailer's jump reflected lower promotional expenses, reduced distribution costs and a sharper focus on a more fully featured, higher end entertainment products.
Despite the difficult economic environment, Good Guys product strategy has 'translated into solid gross profit margins, and our efforts to reduce costs and streamline operations have allowed us to lower expenses,' while continuing high-quality service, said Kenneth R. Weller, president/CEO.
Going in the other direction, selling, general and administrative (SG&A) expenses increased 480 basis points in the third quarter, reaching 30.1 percent, compared with 25.3 percent in the same three months last year. This was due to a planned increase in selling expenses associated with the company's $1.4 million contribution to charity and the inclusion of a $9.8 million real estate gain.
As reported in mid-December, Good Guys' net sales in the third quarter dropped 4 percent, to $198 million, down from $206.9 million in the same quarter in 2000.
'Sales to date in December have been slightly below expectations,' continued Weller, 'but it is still too early to project how December will close.'
For the nine months, Good Guys reduced its net loss to $22.7 million, down from $24 million in the same period last year. Sales for the nine months were $560.5 million, down from $595.9 million in the year-ago third quarter.
Gross profit margin increased 70 basis points in the third quarter, to 28.8 percent, while SG&A expenses climbed 260 basis points, to 30.5 percent.