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March Retail Sales Mixed

NEW YORK — March was a mixed bag for CE retailers, who fared better than their broad-line brethren in sales, but faced lamb-like earnings and comp-store gains.

Although RadioShack expects lower first-quarter earnings, it said sales to its dealer/franchise stores climbed 8 percent in March to $377.1 million, while comp-store sales for company-owned units climbed 7 percent.

Despite the sales hikes, RadioShack said it expects earnings-per-share growth of 7 percent to 10 percent in fiscal 2001, down from the 15 percent to 20 percent it forecast in February. It also warned that first-quarter earnings should range between 31 cents and 33 cents, compared with 34 cents in the first three months of last year, due to clearance sales of computers, promotions on wireless phones and services, and slower activation rates for home satellite systems.

Investors responded by sending RadioShack shares down $10.20, or 26.5 percent, to close at $28.30 in the wake of the announcement. But chairman/CEO Len Roberts insisted that the future remains bright. “For the balance of fiscal 2001, we are focusing on moderate top-line sales growth of 6 to 8 percent, along with a very keen focus on gross-margin enhancement and expense reduction,” he said.

Riding the acquisition wave (see story on p. 11), Tweeter Home Entertainment Group said total revenue increased 36.8 percent to $117.8 million for its fiscal second quarter ending March 31. Comp-store sales grew 3.6 percent, excluding the United Audio Centers and Douglas TV chains, which were acquired last year and were accounted for as purchases. Those two chains showed a same-store decrease of 7.4 percent for the period.

Tweeter attributed digital and new technology products, as well as its installation business, for much of its growth in the second quarter. DVD margins increased 220 basis points, and projection TV sales were up 28 percent, with digital sets representing 79 percent of the category. Tube TVs were up a more modest 14 percent, with digital sets representing 44 percent of the segment.

Overall, sales of digital products represented more than 42 percent of Tweeter’s revenue, with plasma TVs, up 113 percent, showing the fastest growth.

Meanwhile, Sears said that retail revenues for the five weeks ending April 7, 2001, were down 5.1 percent to $2.56 billion, and that comparable-store sales decreased 5.3 percent. Chairman/CEO Alan Lacy lamented that “March retail sales fell below expectations, with the slowing economy and colder-than-anticipated weather having an impact on both our hardlines and softlines businesses.”

One of the quarter’s few bright spots was home appliances, which continues to gain market share, he said.

Sharper Image said total March sales increased 17 percent to $23 million. Store sales increased 6 percent to $13.3 million; although comparable-store sales decreased 1 percent. Catalog sales were up 45 percent to $6.3 million, and Internet sales increased 20 percent to $3.4 million from March 2000.