Financial Results and HHGregg and Retailers and Retail and Real Estate & Retail

Retailer HHGregg suffers rare quarterly loss

August 4, 2011

Disappointing sales at stores open at least a year dragged Indianapolis-based HHGregg Inc. to just its second quarterly loss since the company went public in 2007.

The appliance and electronics retailer on Thursday reported a loss of $800,000, or 2 cents per share, in its fiscal first quarter, which ended June 30. That compared with profit of $2.7 million, or 7 cents per share, in the same period last year.

Analysts expected profit of a penny per share.

HHGregg’s only other quarterly loss occurred in the fiscal second quarter of 2007, and that was caused by a special charge related to a debt refinancing.

Same-store sales in the fiscal first quarter declined 13.2 percent compared with an increase of 6.3 percent in the same period last year. The loss was steeper than the 10.8-percent decrease in same-store sales HHGregg reported in the previous quarter.

The company also attributed the loss to an increase in selling, general and administrative expenses, a decrease in the gross-margin rate and additional advertising expenses.

“As expected, our fiscal first quarter was a challenging period,” HHGregg CEO Dennis May said in a prepared statement. “We faced the lapsing of last year’s appliance stimulus program, the grand opening sales from 26 new stores during Q1 last year and our most difficult comparable store sales comparisons in the past 11 quarters.”

Quarterly revenue dipped 1 percent, to $431.5 million.

Video and appliance sales were particularly weak, falling 20.6 percent and 12.6 percent, respectively, at stores open at least a year. Home office sales surged 54.6 percent, though, due to an increased demand for computers and electronic tablets, the company said.

HHGregg opened seven new stores in its fiscal first quarter and remains on track to open 24 during the next quarter, for a first-half total of 31.

Founded in 1955, the chain operates 190 stores in 15 states.

Its shares opened Thursday morning at $12.50 each, down from a 52-week high of $26.69 in December.

 

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