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HHGregg adds furniture, exercise gear as TV sales fall

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HHGregg Inc. is adding furniture and exercise equipment to its 224 stores in coming months as the homegrown company fights to offset a stomach-churning drop in television sales.

The appliances and electronics retailer Friday morning reported a second-quarter same-store sales drop of 8.8 percent overall, but the video category tumbled 20.5 percent, compared to a 4-percent drop during the same period a year earlier.

HHGregg shares jumped nearly 19 percent Friday, to close at $7.60 each.

The chain is facing fierce competition from big-box stores like Walmart and online retailers like Amazon.com as television prices fall and become more of a commodity purchase. To fight back, HHGregg is diversifying its product offerings, offering more computer tablets, mobile phones and appliances, while focusing on very high-end televisions it can still sell profitably.

In the second quarter, the company managed to offset some of the video decline with an 11.8-percent increase in mobile phone sales and a modest 1.1-percent increase in appliance sales.

HHGregg earned $3.8 million, or 11 cents per share, on revenue of $587.6 million for the quarter ended Sept. 30. That compares to earnings of $6 million, or 16 cents per share, on revenue of $618.6 million during the same quarter last year.

The results exceeded analyst expectations by 2 cents per share on the bottom line, but revenue fell short of the average of $638 million analysts expected. The company's guidance of per-share earnings of 90 cents to $1.05 for 2013 fell in line with analyst expectations.

Profit margins improved to 29.6 percent, from 28.6 percent, as the company emphasized more profitable products, including larger-screen LED televisions and more energy-efficient appliances.

The company's sales mix was 36 percent in the video category and 46 percent appliances; the sales breakdown for the same quarter last year was 42 percent video and 40 percent appliances. Mobile phones and an "other" category including audio, mattresses and personal electronics each contribute about 9 percent of sales.

HHGregg said it opened 13 new stores in its fiscal 2013 second quarter, and plans to open a total of 20 during the fiscal year. That represents a pullback on the company's rapid growth plans. The company's shares took a tumble in September after HHGregg abandoned plans for an expansion in Michigan.

Shares closed Thursday at $6.39, well off HHGregg's 52-week high of $16.65.

Executives have been taking advantage of the lower share price with buybacks. The company repurchased about 1.2 million of its shares in the second quarter at a cost of $8.3 million. HHGregg has $30.5 million remaining on a $50 million buyback authorization.

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  1. The deductible is entirely paid by the POWER account. No one ever has to contribute more than $25/month into the POWER account and it is often less. The only cost not paid out of the POWER account is the ER copay ($8-25) for non-emergent use of the ER. And under HIP 2.0, if a member calls the toll-free, 24 hour nurse line, and the nurse tells them to go to the ER, the copay is waived. It's also waived if the member is admitted to the hospital. Honestly, although it is certainly not "free" - I think Indiana has created a decent plan for the currently uninsured. Also consider that if a member obtains preventive care, she can lower her monthly contribution for the next year. Non-profits may pay up to 75% of the contribution on behalf of the member, and the member's employer may pay up to 50% of the contribution.

  2. I wonder if the governor could multi-task and talk to CMS about helping Indiana get our state based exchange going so Hoosiers don't lose subsidy if the court decision holds. One option I've seen is for states to contract with healthcare.gov. Or maybe Indiana isn't really interested in healthcare insurance coverage for Hoosiers.

  3. So, how much did either of YOU contribute? HGH Thank you Mr. Ozdemir for your investments in this city and your contribution to the arts.

  4. So heres brilliant planning for you...build a $30 M sports complex with tax dollars, yet send all the hotel tax revenue to Carmel and Fishers. Westfield will unlikely never see a payback but the hotel "centers" of Carmel and Fishers will get rich. Lousy strategy Andy Cook!

  5. AlanB, this is how it works...A corporate welfare queen makes a tiny contribution to the arts and gets tons of positive media from outlets like the IBJ. In turn, they are more easily to get their 10s of millions of dollars of corporate welfare (ironically from the same people who are against welfare for humans).

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