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New store openings drive HHGregg profit

August 5, 2010

The opening of 26 new stores helped HHGregg Inc. earn a profit of $2.7 million in its fiscal first quarter, the Indianapolis-based appliance and electronics retailer announced Thursday morning.

For the quarter ended June 30, HHGregg’s profit was 85 percent higher than the year-ago period. The earnings of 7 cents per share exceeded analysts’ expectations of 2 cents per share.

Revenue for the quarter was up 53 percent, to $436 million, topping analyst expectations of $397 million.

Same-store sales, which increased 6.3 percent from the year-ago period, were mostly driven by a 16-percent increase in appliance sales and a 2-percent rise in sales in the video category. Same-store sales reflect revenue from stores open at least a year.

The company opened 26 new stores in its fiscal first quarter and remains on track to open another 12 stores by the end of the following three months. HHGregg expects to open a total of between 40 and 45 stores in fiscal 2011.

“Productivity of the new stores is strong, and we remain confident in our ability to execute our differentiated operating model in new markets and gain market share in the current environment,” HHGregg CEO Dennis May said in a prepared statement.

HHGregg said it likely will not update its fiscal-year earnings guidance of $1.35 to $1.45 per share until next quarter.
 
Shares of HHGregg closed Wednesday at $21.30, down from a 52-week high of $31.14 in June.

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