H.h. gregg stands by its decision “not to fully...
H.h. gregg stands by its decision “not to fully participate in the heavily promotional environment” during the holiday selling season, CEO Dennis May said in a statement Monday announcing bleak preliminary sales results for the chain’s third quarter ended Dec.…
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31. “We did manage our inventory and liquidity position well, with total inventory per store below prior year levels,” May said. The chain estimates its Q3 sales fell 11.6 percent to $707.1 million on same-store sales decreases of 11.2 percent. Though same-store sales of in-home products jumped 36.1 percent and appliance sales were up 1.5 percent, CE category same-store sales fell 19.7 percent, and same-store sales of computing and wireless decreased 24.5 percent. May called the CE and computing and wireless results “significantly below our expectations,” and blamed the “sales miss” on “increased promotional offerings of televisions and tablet products across a variety of retail formats.” That environment “reinforces our decision to continue to transform our business towards a broader assortment of home products, including appliances and home furnishings,” May said. The company expects its earnings performance to be “materially below” that of its full-year forecast when it releases Q3 results on Jan. 30, the company said. In recent forecasts, h.h. gregg has said it expects its full-year net profit to rise to 75-90 cents a share from 74 cents a year earlier. But those forecasts assumed same-store sales decreases for the year would hold at 2-3.5 percent. Despite its report of the Q3 sales miss, h.h. gregg shares rose 5.4 percent midday to $12.87 before closing the day. Analysts saw that as vindication of h.h. gregg’s decision not to go toe to toe with Best Buy in matching holiday doorbuster offers. However, h.h. gregg closed the day 4.9 percent lower at $12.94. For Best Buy, where executives made clear before the holiday selling season that they did not “want to be beaten” in matching or exceeding the best holiday deals available (CED Aug 21 p1), shares midday were down 4 percent to $39.05 before closing the day 3 percent lower at $39.41.