Updated! Canton, Mass. — Specialty retailer Tweeter Home Entertainment Group took a positive bounce in its fiscal first quarter, boosting sales 3 percent to $266.5 million, from $258.2 million in the same quarter a year ago, and raising net income from continuing operations by 158 percent to $14.5 million, from $5.6 million in the fourth quarter the prior year.
Tweeter, a national high-end A/V specialty business, which has been re-inventing itself with an emphasis on custom installation, reported a comp-store sales increase of 6 percent in the first quarter, ended Dec. 31.
“Our profit performance improved as a result o comparable store revenue growth, 80 basis points of expansion in gross margins and 130 basis points of leverage in SG&A expenses,” said Joe McGuire, president/CEO. “Overall, we feel it is an excellent start to the year.”
Tweeter net income for the first quarter reached $14.3 million, up from a year-ago $4.9 million.
In a conference call, McGuire noted that the company will close five stores and open three new locations this year. The new units will be based on the company’s one-year-old prototype lab store in Las Vegas, which has yielded positive results in the areas of gross margin, labor attachment rates and level of interaction with customers, McGuire said.
Tweeter will also remodel four stores and change the operating model within three locations to help determine what level of investment is needed to bring elements of the prototype store system-wide.
Separately, McGuire declined to answer an analyst’s question regarding Tweeter’s participation in the launch of Toshiba’s HD DVD player this March. During a TWICE retail panel held earlier this month during the International Consumer Electronics Show (CES), McGuire indicated that Tweeter would reluctantly support both the HD DVD and Blu-ray formats. – Additional reporting by Alan Wolf