Shares of HHGregg Inc. fell Thursday after the Indianapolis-based appliance and electronics retailer lowered its earnings outlook, citing weak demand for new video technology products.
By 12:15 p.m., the company’s stock price had tumbled nearly 8 percent to $20.15.
Sales of LED and 3-D televisions were less than expected while sales of lower-priced TVs were higher than anticipated, which hurt profit margins, HHGregg President and CEO Dennis May said in a written statement.
“While we are pleased with our overall sales and market share gains in the video category, our mix of video product was different than our expectations going into the holiday selling season,” he said.
The company now expects profit of $1.15 to $1.23 during fiscal 2011, which ends in March. That's well below its earlier outlook of $1.30 to $1.45 per share.
Analysts had expected $1.31 in earnings per share.
The company expects revenue to increase 38 percent to 40 percent from 2010, less than the 40 percent to 45 percent rise it had predicted. Analysts expect revenue of $2.18 billion, an increase of nearly 43 percent from 2010 revenue of $1.53 billion.
For the fiscal third quarter, which ended Dec. 31, HHGregg expects revenue to increase 30.6 percent, to $653.7 million. But same-store sales during the period are expected to slide 6.2 percent.
HHGregg will report fiscal third-quarter earnings on Feb. 8.
In November, the company said its second-quarter profit fell 20.4 percent from a year earlier despite a big rise in revenue brought on by expansion.
HHGregg expects to open between 35 and 45 new stores in fiscal 2012. Cities targeted are Chicago, Miami and Pittsburgh. It currently has 173 stores in 15 states.