"We didn't achieve our internal plans for profitability for the quarter, and fell about $2 million short of our EBT goal," said president and CEO Jeffrey Stone during Tuesday's earnings conference call. One reason for that shortfall was a sharp increase in the company's spending on marketing during the quarter.

"In launching our new marketing/branding strategy, we believed it was important to overspend our traditional advertising levels in the first quarter, so that the campaign would get immediate traction," Stone noted. "We'll see how that strategy and the expense play out over the balance of the year, as we report sales trends. Our plan for the balance of the year calls for a return to more historical levels of gross advertising spending."

Stone also expects continued costs associated with the further development of Tweeter's new prototype, called the Tweeter Entertainment Architects store, which the company unveiled earlier this month in suburban Las Vegas. The concept features a showroom allowing consumers to experience television, music, photos and so forth in a "notional digital home" consisting of a living room, kitchen, bedroom, sports bar, office and even an outdoor setting. The store's design encourages consumers to use Windows-based entertainment devices in this setting, and then work with an "entertainment architect" to customize a set of interrelated electronics goods for purchase. Stone called the prototype "the future of Tweeters."