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Tweeter's Comp Sales Inch Up

CANTON, MA-The electronics chain is betting big on a concept it calls "entertainment architects."

By Dees Stribling | Updated on January 25, 2005

CANTON, MA-Tweeter Home Entertainment Group Inc. scored a modest 2% increase in comp-store sales in its first fiscal quarter of 2005 (ended Dec. 31), compared with the same period in the previous year, but it also reported a stagnant net income for the quarter of $5.3 million, the same as the first fiscal quarter of 2004. Earnings were $0.21 per share, compared to $0.22 last year.

“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.”

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