Computer retailer CompUSA Inc says its fourth quarter will show a loss of between $0.15 and $0.20 per share, before charges, on sales that rose just 3% year-over-year to $1.19bn. The consensus estimate of analysts surveyed by First Call was for a profit of $0.06 per share. Comparable store sales fell 8.7% in the quarter for the 127 stores open one year or more, while average sales per store fell roughly 15% from the year-ago period. The Dallas-based company is placing the majority of blame on the timing of Microsoft Corp’s release of Windows 98, saying that customers delayed purchasing new systems until the new operating system was made available, with just three days left in the quarter. Other factors contributing to the poor quarter were the limited availability of Pentium II-based notebooks and a continuing decline in average selling prices. All of these factors led gross margins down to between 12.3% and 12.7%, compared to 14.8% a year ago and 14.1% in the previous quarter. For the full year, sales rose 155 to $5.29bn, while comparable store sales rose 1.7%. Aside from the operational issues, the company also will be taking an after-tax charge in the fourth quarter of $30m to $35m as a result of the implementation of a new IT strategy. The new strategy includes outsourcing substantially all of the company’s IT processes and implementing an Enterprise Resource Management program. The plan would replace a substantial portion of CompUSA’s existing IT systems as well as certain systems in the development stage. The company says it’s in final negotiations with software and service companies and plans to execute and announce definitive agreements within 90 days. The company will report final results for the quarter on August 12.
