Indianapolis-based HHGregg Inc. boosted its fourth-quarter profit thanks to 42 stores that opened during 2010, off-setting decreased sales at retail locations operating for more than a year.
The appliance and electronic retailer on Thursday reported profit of $14.6 million, or 36 cents per diluted share, compared to $10 million, or 25 cents a share, in the same period last year.
But same-store sales declined 10.8 percent, largely due to lower prices and less demand for emerging video technology during the fiscal quarter ended March 31. Overall revenue in the quarter reached $507 million, up 21.5 percent.
For the full fiscal year, HHGregg posted revenue of $2.1 billion and profit of $48.2 million, or $1.19 per diluted share—better than a revised $1.10-to-$1.15-per-share estimate made in February. Last year, the company reported profit of $39.2 million, or $1.03 per share.
“Despite industry headwinds and inclement weather around the Super Bowl selling period, we aggressively managed the business and delivered meaningful earnings growth in the fourth fiscal quarter,” CEO Dennis May said in a prepared statement.
Nevertheless, company leaders acknowledged that something must be done about the decline in same-store sales, which has persisted for two years.
May said the chain will address the problem through a number of initiatives during the 2012 fiscal year. Among them: increasing HHGregg’s share of the appliance market, enhancing the company’s online capabilities and launching a new advertising campaign.
HHGregg also plans to keep adding stores—as many as 45 in the current fiscal year, including its first locations in Pittsburgh, Miami and Chicago.
Founded in 1955, the chain had just 50 stores in 2004; it now has 173 and is building toward a goal of 600 locations coast-to-coast.
Despite the company’s growth, HHGregg shares lost about half of their value in the past year. Shares closed Wednesday at $12.96, up 11 cents for the day.