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HHGregg shares plummet on new earnings forecast

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HHGregg Inc. shares plunged Wednesday after the Indianapolis-based appliance and electronics retailer said it expects to report a wider first-quarter loss because of weak sales in its video business. It also cut its full-year outlook.

Shares fell 38.5 percent Wednesday morning, or $4.44, to $7.10 each.

The Indianapolis-based company said Tuesday it expects a loss of between $5.7 million and $6.2 million, or 16 to 17 cents per share, for the quarter that ends June 30. That compares with a loss of $800,000, or 2 cents per share, in last year's first quarter.

HHGregg expects its quarterly revenue will increase nearly 14 percent, to $490 million, largely because it added 30 stores.

The earnings and revenue outlook is short of market expectations. Analysts polled by FactSet anticipated the company would post a loss of 4 cents per share on revenue of $509.5 million.

HHGregg CEO Dennis May said the quarter's sales results indicate the difficulty in the retail environment. The company is testing new products to help fill the void from sales declines in the video category and to help differentiate its business from big-box retail competitors.

The electronics business has been tough in recent years, with electronics specialists like HHGregg competing with big-box stores like Best Buy, online retailers like Amazon.com and discounters like Wal-Mart. Shoppers are focusing hard on price.

The company cut its full-year outlook, saying it expects to earn 90 cents to $1.25 per share for its 2013 fiscal year, down from its prior forecast of $1.12 to $1.27. Analysts forecast the company would earn $1.20 per share for the year.

Hhgregg said it expects its sales for the year will increase 3 percent to 6 percent, compared with prior guidance of gains of 9 percent to 12 percent.
 

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  • Same Bad Experience
    I just wanted to say that I had the same experience. The salesman was great but the service and delivery after the sale was the worst I have ever experienced. It was so bad in fact I as so mad I created a webpage on FB about HHGREGG Sucks http://www.facebook.com/pages/HhgregG-Sucks/340266106058412
  • Good Service
    I recently bought 2 Verizon phones at hhgregg and had great service. They are new to Verizon, but did a good job and had best pricing on the tag. My sister had her fridge break, she measured wrong and the delivered fridge did not fit. They immediately picked it up, delivered a different model and had great customer service throughout the sale. I think there is still a place for good service from a company. I shop online a lot and have mixed reviews on service. I won't go in Best Buy after some of the worst service in any store of any kind.
  • Customer Dis-service
    Thes commissioned salesfolk really embelish when it comes to making a sale. The most recent example is a salesman trying to get me to buy n extended warranty. "This (TV) set only has a 90 day factory warranty," so you need an extended service plan. The set had a one year warranty. Close, he was only off by 275 days, or so. It's pure hell trying to buy a simple item, too.
  • homeowner
    In the last 8 years we have bought a Fine Line kitchen, washer/dryer and 2 flat screen TV's but when we recently bought a 2nd refrigerator and find a delivery schedule they did every they could to demonstrate poor customer service. We talked to 4 individuals and a robo call until we just canceled the whole thing. No wonder they are losing out to Lowes and Best Buys.
    • Is it that hard?
      HH Gregg should be blowing the competition away from a customer service perspective. I know I'd rather do business with a local firm, even if I have to spend a little more. But I won't spend more and get the same crappy service I get from Best Buy or Wal*Mart. My wife bought a laptop on line for in store pickup. When she went in to get it, there was one left and being handed to another customer as she walked up to the counter. Apparently one who'd walked in and asked for the advertised model. The excuse she was given... "oh, they're on commission so that's not surprising." In the past I'd bought a big screen HDTV, a sound system, and a dishwasher there. I'm done with them now.
      • No surprise
        This company is dinosaur. It can't compete without I proved customer service. Their help desks are in foreign countries with uninformed and difficult to understand phone workers. I was advised by them that my 5 year warranty started after the manufacturer's warranty, but that it would take 3 days to verify it with HH Gregg. When I called the store, I was left on hold for 20 minutes and then over 10 minutes. I never got to speak to a manager, and was finally told by a salesman that I was misinformed by their Indian phone bank. The store offered no explanation and no apology for the wasted time, the misrepresented ESP warranty, the misinformation, or the lengthy phone waits. They are broken.

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