Profits up, slow growth at CompUSA
CompUSA more than doubles its profits for the quarter but sees its stock fall 13 percent in trading because of slower sales growth.
The nation's largest computer store retailer reported net profits of $14.5 million, or 31 cents a share, for the quarter ending September 28, up from $6.2 million or 15 cents per share from a year ago.
Although CompUSA beat analysts' estimates of 26 cents a share for the quarter, the stock did not respond to the news, falling as low as 44-7/8 during trading from the previous day's close of 51-5/8.
That marked the second straight price decline for the computer retailer after David Childe, a Salomon Brothers analyst, issued a report yesterday that the company's sales were slowing.
CompUSA's sales at stores opened at least a year--the benchmark for gauging the financial health of a retail chain--rose 7.8 percent in the first quarter over the same time a year ago. However, the most recent financial results reflect a downward trend for two straight quarters. The company's year-to-year growth is far below the levels seen during the third quarter, when the company posted a jump in store sales of 14.1 percent over the same period a year earlier.
The stock took another hit today after James Halpin, CompUSA's chief executive and president, said sales appeared sluggish and expressed guarded optimism about the Christmas buying season.
Reuters contributed to this report.