Pressure in the video category led to a drop...
Pressure in the video category led to a drop in hhgregg revenue for fiscal Q3 2013, ended Dec. 31, the company said in announcing preliminary results Monday. Fiscal Q3 same-store sales dropped 9.7 percent, hhgregg said. Projected net sales fell…
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about 3.6 percent to $799.6 million from the year-ago quarter, led by the video category, which plummeted by 24.6 percent, according to company estimates. In other categories, computing and mobile phones increased 16.2 percent and appliances 6 percent, while the “other” category sank 23.7 percent, the company said. Hhgregg expects net income of approximately $17.4 million for fiscal Q3 2013, compared with profit of $22.5 million for in the year-ago quarter, it said. CEO Dennis May said that “fundamental shifts across the video category” affected sales, “and we were disappointed in our video performance.” He blamed declining demand for flat-screen TVs along with “broadened distribution of large-screen televisions” for negatively impacting overall store traffic and video sales. “During the quarter, we placed less emphasis on lower-end promotional televisions to bolster gross margin rates, which led to an increase in video category and total company gross margin rates,” May said. The retailer continued to test new product categories throughout the quarter along with financing options to “diversify our business and reduce our dependence on new product innovations” in video, he said. Positive sectors for hhgregg included appliances, furniture, mobile phones and Apple products, he said. The company revised its forecast for the full fiscal year to $0.70 to $0.80 net income per diluted share, compared with previous guidance of $0.90 to $1.05 net income per diluted share. The company expects comp store sales for the year to be negative 8.5 percent to negative 7.5 percent, compared with previous projections of negative 6 percent to negative 4 percent. Hhgregg shares ended the day down 5.7 percent to $7.44.