DALLAS, Nov 10 (Reuters) - CompUSA Inc., the nation's
largest computer retailer, Tuesday reported lower quarterly
profits due to weak prices and sluggish sales to businesses and
expressed caution about the upcoming holiday shopping season.
Net income fell to $8.1 million, or 9 cents a diluted
share, in its first quarter ended Sept. 26, from $23.5 million,
or 25 cents a share, a year earlier. The results beat forecasts
of 7 cents a share, according to First Call Corp., which tracks
analysts' estimates.
The latest quarter included a charge equal to 5 cents a
share for CompUSA's acquisition of Computer City stores from
Tandy Corp.
Sales grew to $1.4 billion from $1.1 billion but sales fell
1.7 percent at the 134 CompUSA stores open at least a year.
CompUSA stock fell 56 cents to $14.50 at midday on the
New York Stock Exchange.
Salomon Smith Barney analyst Maureen McGrath said the soft
sales to businesses hurt the stock along with lower prices for
personal computers, as well as the possibility of a promotional
holiday season.
"Lower ASPs (average selling prices) are part of the issue
and there is a sense that promotional activity might be higher
than anticipated," McGrath said. She said CompUSA is expecting
to sell more computers, but at lower prices.
CompUSA, which also sells software and peripherals for
personal computers, said it expects second-quarter same-store
sales to fall because of the softer corporate sales and lower
prices.
"Although we are disappointed with our overall financial
results for the first quarter of fiscal 1999, we are pleased
with the improvements we have made since the fourth quarter of
fiscal 1998," President James Halpin said.
CompUSA completed the purchase of Computer City from Tandy
in September for $211 million and closed 55 of the stores.
CompUSA, with 39 former Computer City stores, has a total of
207 stores and an Internet site to sell personal computers.
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