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Tweeter Comps Sag For Fiscal Year

Note correction in fourth paragraph below. Hillcrest comp sales increased 35.3 percent.

Canton, Mass. – Despite sharp gains in total revenue from recent acquisitions, comparable store sales at Tweeter Home Entertainment Group softened during its fiscal fourth quarter and full year.

According to the 167-store specialty chain, total sales grew 22 percent to $183 million for the quarter ended Sept. 30, while total full year revenue rose 47.4 percent to $796 million.

By contrast, fourth quarter comps, excluding the Hillcrest chain, edged down 1.4 percent, and same-store sales slipped 3.3 percent for the year, excluding acquired chains for the first 12 months of operation.

Hillcrest, which was acquired on March 1, saw its comp sales increase 35.3 percent for the quarter.

‘After four successive years of comp store growth we gave a little back this year,’ said Tweeter president/CEO Jeff Stone, of Tweeter overall. Citing stabilizing sales following an ‘erratic’ first half, he added, ‘We are hopeful that the dynamics surrounding the general economic marketplace will improve as we move into the December quarter.’

According to Tweeter CFO Joe McGuire, sales are already recovering from their summer slump, with September comps nearly flat following a 3 percent decline in July and a 2 percent dip in August.

Leading the recovery, said Stone, are new technology products like flat panel TV, HD projection sets and satellite-ready car head-units.

Plasma and LCD displays, which accounted for almost 10 percent of total sales in September, remain the retailer’s the fastest-growing category, with sales up 310 percent in the quarter.

Sales of HD and HD-ready projection sets increased 28 percent in the quarter, while sales of digital tube sets grew nearly 40 percent and sales of satellite-ready head-units rose 77 percent for the period.

McGuire said Tweeter’s earnings, to be announced Nov. 26, are in line with previous projections of between 2 cents and 3 cents per share. For fiscal year 2003, the company plans to open 16 new stores, relocate two, spend between $30 million and $32 million in capital expenditures and lower its debt to $35 million.

Total fiscal 2003 sales are expected to grow as much as 16.2 percent to $925 million, same store sales will range between flat and 3 percent growth, and earnings will range between 74 cents and 81 cents per share, the company projected.