Canton, Mass. — Tweeter Home Entertainment Group reported lower revenue, comp sales and income for its first fiscal quarter, which ended Dec. 31.
Tweeter reported total revenue from continuing operations decreased 12 percent to $234 million, from $266 million last year. Revenue from continuing operations included sales from 153 stores this quarter compared with 157 stores a year ago. Comp-store sales decreased 10 percent during the quarter.
The chain said the bulk of the revenue decline came in the projection TV category, which decreased about $22 million on a year-over-year basis.
Operating income for the quarter was $2.8 million compared with $15.5 million last year. Net income from continuing operations for the three month period was $2.3 million compared with $14.7 million for the same period last year.
“Our first-quarter earnings were defined by the intense competition in the television category,” said Tweeter’s president/CEO Joe McGuire in a prepared statement. “We sold 33 percent fewer projection TV sets and experienced a 17 percent decline in their average selling price. Although we sold more sets in the on-wall category, those average selling prices were down 24 percent. In total, the gross margin for the television category was down by approximately 600 basis points. Even though we successfully maintained our margin rate in several other categories, it wasn’t enough to make up for the margin rate decline in the television business.”
McGuire continued, “We have been able to maintain our debt levels through sound management of our cash flow, reducing inventory, particularly in projection television, and decreasing our expense levels. We are also investigating other strategic alternatives in order to meet our short- term capital needs, including the monetization of a federal tax refund or the sale of our investment in Tivoli.”
The company operates 153 stores under the Tweeter, hifi buys, Sound Advice and Showcase Home Entertainment names. The company’s stores are located in the following markets: New England, the Mid-Atlantic, Chicago, the Southeast (including Florida), Texas, Southern California, Phoenix and Las Vegas.