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HHGregg posts quarterly loss on poor TV sales, as expected

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Disappointing sales at stores open at least a year dragged Indianapolis-based HHGregg Inc. to a rare quarterly loss, the appliance and electronics retail chain said on Thursday.

HHGregg had posted a profit in its previous three quarters, and its latest loss is just the company’s third since going public in 2007.

For its fiscal first quarter ended June 30, the company lost $5.7 million, or 16 cents per share, compared with a loss of $800,000, or 2 cents per share, in the same period of last year.

HHGregg had anticipated the disappointing earnings. The company announced last month that it expected to report a wider first-quarter loss because of weak sales in its video business. It also cut its full-year outlook.

“As we announced in our pre-release, our first fiscal quarter proved to be more challenging than anticipated with sales and earnings coming in below our original expectations,” HHGregg CEO Dennis May said in a prepared statement. “During the company’s 57-year history, we have been successful in adapting our business to fit the changing needs of consumers, and remain confident in our ability to navigate through this difficult cycle.”

Same-store sales decreased 5.1 percent during the period after falling 0.7 percent in the previous quarter. It was an improvement over the year-ago period, when same-store sales fell 13.2 percent.

Same-store sales represent revenue from stores open at least a year and are considered a key measure of a retailer’s health.

HHGregg attributed the latest decrease in same-store sales to a double-digit decline in sales of flat-screen televisions and a low-single-digit decline in their selling prices.

Quarterly revenue increased 13.5 percent, to $489.9 million, compared to the year-ago period, due to the opening of 30 stores within the past year.

The company reaffirmed the reduction to its full-year outlook announced July 11. HHGregg expects earnings in the range of 90 cents to $1.05 per share for its 2013 fiscal year, down from its prior forecast of $1.12 to $1.27.

HHGregg said it expects its sales for the year will increase in the range of 3 percent to 6 percent, with a same-store sales decrease of 4 percent to 6 percent.

The electronics business has been tough in recent years, as HHGregg competes against big-box rivals like Best Buy, online retailers like Amazon.com and discounters like Walmart.

HHGregg operates 212 stores in 17 states.

Company shares rose a penny in early trading Thursday, to $6.81 each, but are down 40 percent since the beginning of July.




 

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