Computer retailer CompUSA Inc saw third quarter net income slip 22% amid declining sales and lower average selling prices. The Dallas-based company posted net income of $25.4m, or $0.27 per share, on revenue that rose 14.1% year-over-year to $1.45bn. Comparable store sales were up 1.2% for the 122 stores open a year or more. Earnings still managed to edge out the $0.25 consensus estimate of analysts surveyed by First Call. Another reason for the decline from last year was higher costs from strategic initiatives, such as the self-branded build-to-order PC business and increased advertising activity. Other initiatives on the go include its service-providing business centers, call center expansion, internet selling and a mail order division. The higher costs impacted the bottom line to the tune of $0.03 to $0.04 for the quarter, and are expected to continue doing so for the next several quarters. Business conditions are still looking weak, however, and same store sales are expected to be down slightly in the current fourth quarter – typically its weakest – after previous predictions that they would be flat. Gross margins for next quarter are expected to be down from the year-ago quarter’s 14.8% but no lower than this quarter’s 41.1%. The company says it’s looking at every aspect of its business and promises action that will make operations as efficient as possible. A spokesperson wouldn’t elaborate on what actions might result, saying only, It was meant to be a broad statement. CompUSA is currently fighting a class action suit from shareholders that accuses the company and its officers of securities fraud. The suit was filed on April 23 in a Dallas federal court and alleges that the company misled investors about its sales and profit margins, which led to an inflated stock price. CompUSA shares closed Wednesday at $17.8125, down $0.25, and less than half the value of their record high of $38 in December of last year.
