Tweeter Continues to Struggle
Tweeter Home Entertainment Group announced its earnings results for its first fiscal quarter ended December 31, 2006, and the results were not promising.
For the quarter, total revenue from continuing operations decreased 12 percent to $234 million, down from $266 million last year. Although Tweeter’s continuing operations included sales from 153 stores this quarter, compared to 157 stores a year ago, comparable-store sales decreased 10 percent. Tweeter blamed the decline on projection television revenues, which decreased approximately $22 million on a year over year basis.
Operating income for quarter was $2.8 million, compared to $15.5 million last year. Net income from continuing operations was $2.3 million, compared to $14.7 million last year.
“Our first quarter earnings were defined by the intense competition in the television category,” said Tweeter President and CEO Joe McGuire. “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.”
Tweeter’s fiscal 2006 revenues were $775 million. The chain has locations in New England, the Mid-Atlantic, Chicago, the Southeast, Florida, Texas, Southern California, Phoenix and Las Vegas.