Computer retailing giant CompUSA delivered on its promise of a poor end to its financial year, reporting a net loss for the fourth quarter of $51.4m, compared to net income of $22.9m, or $0.24 per share, a year ago. Results for the quarter included a one-time amortization charge of $55.9m, which the company had warned of in pre-announcing its disappointing results last month (CI No 3,445). The charge comes as a result of the implementation of a new IT strategy, which includes outsourcing substantially all of the company’s IT processes and implementing an Enterprise Resource Management program. Without the charge, net losses would have been $0.19 per share, a penny worse than the revised First Call consensus. Analysts had originally been looking for a profit of $0.06 per share. For the year, net income was down 66.4% at $31.5m on revenue up 14.7% at $5.29bn. Earnings per share for the year fell to $0.33 from $0.99 last year. Comparable store sales were down 8.7% in the fourth quarter for the 127 stores open one year or more. For the year, comparable store sales were up 1.7%. The company blames several factors for the weak results including the timing of the release of Windows 98, delays in product transitions, limited product availability and lower average selling prices for certain products. Looking ahead, the company is taking a cautious stance on fiscal 1999. Due to lower ASPs compared to the same period last year, comparable store sales are expected to be roughly flat comparable store sales for the first quarter. In addition, gross margin for the quarter should be lower than the year-ago quarter’s 14.7%, but significantly higher than the 12.6% margin for the fourth quarter.
