Good Guys Inc., a consumer-electronics retailer that forecast a profit this fiscal year, now expects a loss instead because of dwindling sales caused by slowing U.S. economic growth, the company said Wednesday.
San Francisco-based Good Guys expects a loss in the year ending Feb. 28 that narrows to $4 million to $7 million, from $17.2 million in fiscal 2001. In fiscal 2003, the company will have profit of $10 million to $20 million, Good Guys said.
Earlier this year, as consumer spending slowed, Good Guys cut about 450 jobs, changed its commission plan and realigned staffing. In June, Good Guys said cost-cutting would overcome the economic hurdles and help the retailer to its first profitable year since 1995. It didn't give a profit forecast at the time.
"We absolutely have seen the economy affect our business and the speed of our recovery," Chief Executive Ronald Unkefer said. Good Guys targets affluent customers with higher-priced electronics than national chains such as Best Buy Co. and Circuit City Group Inc., Unkefer said.
"A lot of the things we sell are not at the Best Buys and the Circuit Citys of the world," Unkefer said. Products carried in Good Guys stores include Mitsubishi video products, Yamaha audio systems and high-priced Sony video items, Unkefer said.
Good Guys expects its fiscal second-quarter loss to widen to $4.5 million to $6.5 million, from $3.4 million a year earlier. Same-store sales will fall 6% to 8%, compared with an increase of 13% a year ago, the company said.
Sales will increase during the Christmas season, the company's fourth quarter, Unkefer said.
The company said it will resume an expansion plan next year after a three-year halt. Good Guys will open two stores in 2002 and six stores in 2003, the company said. It now has 79 stores mostly in western U.S. states, including California, Nevada, Oregon and Washington.
Good Guys' shares fell 24 cents to close at $3.66 on Nasdaq.