hhgregg Preliminary Sales Miss TargetPosted: Updated:
Indianapolis-based hhgregg Inc. says preliminary sales results for its fiscal third quarter were "significantly below" expectations. The company plans to update its guidance later this month.
January 6, 2014
Indianapolis, Ind. -- hhgregg, Inc. (NYSE:HGG) today announced preliminary sales results for the third fiscal quarter ended December 31, 2013. The Company also announced details of its third fiscal quarter earnings conference call.
For the third fiscal quarter of 2014, the Company estimates net sales to be approximately $707.1 million, a decrease of approximately 11.6% as compared to net sales of $799.6 million reported for the third fiscal quarter of 2013. Third fiscal quarter comparable store sales are estimated to have decreased approximately 11.2%, with the appliance category expected to have increased approximately 1.5%, the consumer electronic category expected to have decreased approximately 19.7%, the computing and wireless category expected to have decreased approximately 24.5%, and the home products category expected to have increased approximately 36.1%.
Dennis May, President and CEO commented, "Our sales of consumer electronics and computing and wireless products were significantly below our expectations during the quarter. Our third fiscal quarter, while solidly profitable, is expected to be materially below both our expectations and prior year for diluted earnings per share, driven by the net sales miss. Our holiday sales were significantly impacted by increased promotional offerings of televisions and tablet products across a variety of retail formats. While we are disappointed with these sales results, we made the strategic decision during the quarter not to fully participate in the heavily promotional environment. We did manage our inventory and liquidity position well, with total inventory per store below prior year levels."
Mr. May continued, "The heightened promotional nature of the consumer electronics category during the quarter reinforces our decision to continue to transform our business towards a broader assortment of home products, including appliances and home furnishings. We remain pleased with the strength of our appliance and home products categories, with the third fiscal quarter representing our tenth consecutive quarter of comparable store sales increases in the appliance category. We plan to continue to implement initiatives to drive profitable sales and customer traffic in these and other newer categories. Management remains committed to transforming the Company’s sales mix and broadening its reach to both new and existing customers."
All figures in this release are preliminary and remain subject to the completion of normal quarter-end accounting procedures and adjustments, which could result in changes to these preliminary results. hhgregg will provide additional information regarding its quarterly results and will update full year guidance when it reports its third fiscal quarter results on January 30, 2014.
In light of the preliminary third fiscal quarter net sales miss, the Company expects to be materially below its previous full fiscal year guidance. Given the volatile sales environment and the importance of the January selling period, the Company expects to reassess and update its annual earnings per diluted share guidance and embedded assumptions as part of its full earnings release which is scheduled for January 30, 2014.
Conference Call to Discuss Full Operating Results for the Third Fiscal Quarter 2014
hhgregg will be conducting a conference call to discuss operating results for the three months ended December 31, 2013, on Thursday, January 30, 2014 at 9:00 a.m. (Eastern Time). Interested investors and other parties may listen to a simultaneous webcast of the conference call by logging onto hhgregg's website at www.hhgregg.com. The on-line replay will be available for a limited time immediately following the call. The call can also be accessed live over the phone by dialing (877) 304-8963. Callers should reference the hhgregg earnings call.
Source: hhgregg Inc.