Plummeting Ultra HD TV ASPs Are Drag on h.h. gregg Fiscal Q1 Revenue
Plummeting 4K TV prices offset appliance gains at h.h. gregg in fiscal Q1 as revenue fell 4 percent year-over-year to $424 million. Average selling prices plunged 29.6 percent “across the market,” said CEO Robert Riesbeck on a Thursday earnings call,…
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citing NPD figures, which were “in line with our results,” he said. Unit sales were up 81 percent in 4K TVs, “but with that type of decline in ASP, it is a challenge” that will continue through the rest of the year, Riesbeck said. The retailer is "gaining traction" on initiatives on appliances and furniture, he said. Appliances had a 3.7 percent comparable store sales increase in the quarter, he said. Gross margin improved in the quarter by 59 basis points through sales mix and higher gross margin rates in appliances and home products that were offset by the sales decline in CE, he said. CE sales were 30 percent of the mix (down 17.4 percent vs. the year ago quarter) compared with 64 percent for appliances and 6 percent for home products, he said. The negative CE comp was driven primarily by a negative 16.2 percent comp sales drop in video, which makes up three-fourths of the category. H.h. gregg “overindexed” in 4K TVs, Riesbeck said, and is working on several initiatives in CE to compete in the “difficult segment.” They include adding “key vendors and products” not currently in its CE mix and working through a “SKU rationalization to allow for expanded premium brands in smaller sizes” in stores and online, he said. The retailer also added to its leadership team for the category and both initiatives will be in place by Labor Day, he said. To help manage costs, h.h. gregg is closing its Indianapolis and Chicago distribution centers and consolidating operations in a new facility in the Cincinnati area, said Riesbeck. It will close six stores as part of the consolidation, including five in Wisconsin, and doesn’t expect additional “significant” store closings, he said. Net loss for the quarter was $7.2 million compared with an $8.6 million loss in the year-ago quarter. Shares closed down 4 percent Thursday to $2.19.