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HHGregg reports disappointing holiday sales

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HHGregg Inc. on Monday morning announced preliminary sales figures for its latest quarter that fall well short of what the company recorded a year ago.

The Indianapolis-based electronics and appliance retailer said it had net sales of $707.1 million in its fiscal third quarter ended Dec. 31. That's an 11.6-percent decrease from the same quarter in 2012.

HHGregg shares sank more than 8 percent shortly after the market opened Monday, to $12.45 per share, after closing at $13.60 Friday.

Same-store sales, which exclude sales at stores open less than a year, are expected to have declined 11.2 percent, the company said.

HHGregg CEO Dennis May said the quarter was expected to be "solidly profitable," but would be "materially below both our expectations and prior year for diluted earnings per share, driven by the net sales miss."

May attributed the disappointing sales figures to the company’s decision to avoid offering products at severely deep discounts.

“Our holiday sales were significantly impacted by increased promotional offerings of televisions and tablet products across a variety of retail formats,” he said. “While we are disappointed with these sales results, we made the strategic decision during the quarter not to fully participate in the heavily promotional environment.”

Company sales of computers and wireless products are expected to have fallen 24.5 percent with television sales falling nearly 20 percent, HHGregg said.

On a brighter note, sales of home products are expected to have increased 36.1 percent and appliances 1.5 percent.

The company said it chose to lessen its reliance on the ultra-competitive consumer electronics category by introducing home products.

“The heightened promotional nature of the consumer electronics category during the quarter reinforces our decision to continue to transform our business towards a broader assortment of home products, including appliances and home furnishings,” May said.

HHGregg is set to report its official third-quarter earnings report Jan. 30.
 

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  • Not suprised
    I bought 3 ipod 4th gens from them for Christmas 2012 for my three kids and was talked into buying the warranty for all three I was told it was a 2 year replacement plan and covered everything all I had to do was bring it into the store and they would exchange it for another one. Sounding like a great plan especially for kids I added it. Today one of them cracked their screens and when I called to find out what I need to do I was told that the salesman told me incorrectly and I purchased the wrong coverage. I only purchased this coverage based on his description and now find out it was incorrect and they won't cover it and how sorry they are but they do have the 5th gens in stock at a good price. But if it makes me feel better the employee that sold me the incorrect coverage and misrepresented their company no longer works there. Unfortunately no that does not make me feel better. What would make me feel better is rectify this situation which the store will not do. It is not my fault I followed your employee's advice and bought the coverage based on his word and authority as an employee. If your employees don't understand the details and tells the customers incorrectly how are we to know. We put our trust in you as a company and expect honesty in return. I feel lied to in order to make a sale. Perhaps if they took better care of their customers then their sales would go up.
  • Customer Service is the problem
    I went to HH Gregg twice over Christmas intending to buy stereo equipment and a notebook computer. The firsst time I had trouble getting the attention of a sales person, and when I did, he abandoned me before I made a decision. The second time, I stood in front of the computer I wanted for fifteen minutes without anyone offering assistance. I left the store, drove home and spent an extra $20 to have Amazon deliver it to my home two days later.

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