Hhgregg Shares Plummet After Negative Holiday Season Sales Report
Hhgregg shares plunged 41 percent Tuesday to close the day at 78 cents after the retailer released a disappointing holiday sales report. In a preliminary sales release Monday, the company projected Q3 FY 2017 sales of $453 million, a 24…
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percent drop from the year-ago quarter. Comparable store sales fell 22 percent, and CE sales plunged 39 percent year on year, it said. Sales of appliances and home products, which the retailer positions as growth categories, dropped 4 percent and 9 percent in the quarter, it said. CEO Robert Riesbeck attributed results to “competitive pressures in the market, specifically in consumer electronics as it is a larger mix of our business during the holidays.” The retailer’s transition to a new distribution center also had a “temporary negative impact” on sales in the quarter, Riesbeck said. Hhgregg cautioned about a $7 million-$12 million non-cash charge for “asset impairment” of certain locations in the December quarter based on trends in underperforming markets that aren't expected to recover. “We are pleased with our investments made to shift our focus from consumer electronics to appliances and furniture,” said Riesbeck, citing the company’s earlier decision to “compete less in this category, particularly at the entry level price points.” He said the retailer will focus on appliances and home products, while continuing its strategy to “reposition our consumer electronics business to focus on the premium models." It will hold its Q3 earnings call Jan. 26.