Contrary to the company slogan, perhaps every day is not a great day at CompUSA, as the computer retailer announced it will see limited third-quarter sales growth and says it’s being hurt by the shift toward low-cost PCs. Sales for the quarter, ended March 28, increased 14% to $1.45bn. Comparable store sales rose just 1.2% in the quarter, however. For the nine-month period, net sales rose 18% to $4.1bn, while comparable store sales rose 5.2%. The Dallas-based company says it’s disappointed by overall sales growth and points out that – while unit sales rose during the quarter – average selling prices declined, although the company would not say by how much. Sales per store actually fell about 6% year-over-year and that, coupled with increased investments, will bring margins down and operating expenses up. Advertising expense as a percentage of sales will also come in higher during the quarter. Gross margin is expected to be 14.1%. The bulk of the investment costs stem from the launch of the company’s self- branded build-to-order PC business (CI No 3,249). The company says that the BTO business and other initiatives will negatively impact earnings by $0.03 – $0.04 per share, and the drag on the bottom line should continue for the next several quarters. Analysts surveyed by First Call were expecting earnings of $0.41 per share from the third quarter. One of the only bright spots in all this is that inventory levels apparently haven’t been adversely affected by the lower-than-anticipated sales growth. CompUSA will announce final third-quarter results on April 29. Looking ahead to next quarter, the company is counting on comparable same store sales flat with last year, but says that fourth-quarter sales are typically slower. Advertising costs should also increase and margins are expected to be lower than the 14.8% in last year’s quarter but no lower than this quarter’s 14.1%. Analysts expect $0.29 per share. CompUSA shares reacted to the news by falling $5.125, or nearly 20%, to close at $21.
