Good Guys' Q2 Net Loss Widens as Net Sales Decline 7%20 Sep, 2001 By: Hive News
Good Guys, leading specialty retailer of higher-end consumer entertainment electronics, said Thursday that financial results for the second fiscal quarter ended August 31, show a net loss of $4.5 million, or $.20 per share, for the second quarter compared to a net loss of $3.4 million, or $.16 per share, in the same period last year.
The increase in net loss resulted from a 7% decline in net sales, but was partially offset by a reduction in general and administrative costs and an increase in gross profit margin to 29.7% from 29.3% in the year-ago period. The company had projected a net loss for the quarter of $4.5 million to $6.5 million.
For the first six months of fiscal 2002, the net loss was $14.6 million, or $.63 per share, compared to a net loss of $12.1 million, or $.58 per share, for the same period last year.
"Despite the unfavorable economic conditions, Good Guys made significant improvements during the quarter in key, controllableareas of our business, including cost containment, profit margin, instore execution, product presentation and inventorymanagement," said Ronald A. Unkefer, founder, chairman andc.e.o., Good Guys.
"These efforts are helping us build a strong foundation for growth and will allow us to emerge from this downturn as a stronger, healthier company that is better equipped to deal with the inevitable shifts in the economy."
The company previously announced that net sales for the quarter declined to $190.9 million from $204.9 million in the same period last year, reflecting the current economic downturn and the industry-wide softeningin demand for consumer electronics, according to a company press release. Net sales for the six months were $362.5 million compared to$389.0 million for the same period last year and comparable store sales for the quarter and six months declined 8%.
Given the uncertainty of the U.S. economy, particularly in light of last week's tragic events, the company said GoodGuys is preparing for negative sales trends to continue. However, the company continues to expectan improvement in its financial performance for the year.
"Good Guys' focus on super-serving the top half of the consumer electronics market through our distinctive product selection, highly trained product specialists and exemplary customer service has allowed us to strengthen our relationships with customers and vendors, capitalize on the strongdemand for the newest digital and high tech products and further differentiate ourselves from the mass merchants and national chains," said Kenneth R. Weller, president, Good Guys.
"This focus," Weller added, "combined with our efforts to control costs and implement `best practices' from throughout theconsumer electronics industry and retail sector, should help Good Guys to again improve our annual financial performance in fiscal 2002 and keep us firmly on the path to sustainable, long-termprofitability."
At this time, Good Guys and its associates have also pledged 5% of their total sales between Sept. 15 and Sept. 30 to help the victims of the attack on the World Trade Center. Five percent of purchases made through Good Guys' online partner goodguys.com will alsobe contributed. The total gift is estimated to reach more than $1,000,000 and will be donated to The New York Times 9/11 Neediest Fund, which was created by The New York Times Company to support those injured in the attack and the families of those who died.