Harvey Electronics, the upscale metro New York retail chain, posted an increased loss on higher sales for its fiscal second quarter, but still closed out the half with a better than four-fold increase in net earnings.
For the three months to May 1 the six-store chain showed a deficit of $79,400, up from the loss of $74,500 in the same period last year, though sales, at $5.02 million, increased by 23.3%.
For the half Harvey’s earnings jumped to $251,300 from the year-earlier $55,700, and sales rose 27.9% to $11.4 million. Same-store sales were up 5% for the quarter and 9% for the full period.
Harvey said its loss for the quarter included $45,000 in pre-opening expenses for its seventh store, a Bang & Olufsen specialty outlet slated to open in lower Manhattan next month. It also noted that all its stores were profitable for the half.
President Franklin Karp said the combination of revenue from two newer stores and the strong same-store sales gains accounted for its revenue increase. “Sales and gross margin continue to benefit from new digital technologies and increased demand for custom-installation services,” he said.
Karp noted that Harvey’s gross margin rose by more than one full point to 40.4% and 39.9% for the quarter and half, respectively, and credited that to “increased demand for custom-installation services and for new products coupled with less price-sensitive advertising.” An emphasis on upscale merchandise, including DVD players, HDTV and plasma flat-panel TV displays, “have also helped to improve our gross profit margin,” he said.