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HHGregg shares sink on disappointing earnings

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Appliance and electronics retailer HHGregg Inc. said Tuesday that it expects its fiscal third-quarter earnings to decline, hurt by lower-than-expected profit margins in the video-product category and higher spending ad .

Its shares fell more than 15 percent in Tuesday trading.

The Indianapolis-based company expects earnings of $22.5 million, or 60 cents per share, for the three months that ended on Dec. 31. That's down from $26.9 million, or 66 cents per share, in the same period a year ago.

HHGregg expects revenue of $829.5 million, up 27 percent from $653.7 million.

Analysts, on average, were expecting earnings of 77 cents per share on revenue of $811.8 million, according to a poll by FactSet.

Dennis May, HHGregg president and CEO, attributed the disappointing earnings partly to falling prices and tighter profit margins for flat-screen televisions.

“The video industry experienced heavier than expected promotional activity across all screen sizes, which negatively impacted industry average selling prices and margins,” May said.

HHGregg estimated that its sales at stores open at least a year grew 3.9 percent in the third quarter. This is a key measure of a retailer's health because it excludes stores that opened or closed during the year.

For the full year, the company now expects earnings of $1.05 to $1.15 per share, down from its earlier outlook of $1.26 to $1.41 per share.

It expects revenue to grow by 22 to 24 percent, compared with its previous guidance of a 20 percent to 25 percent increase.

Analysts are expecting earnings of $1.34 per share on revenue of $2.5 billion for the year ending in March.

HHGregg plans to officially report its full quarterly financial results on Feb. 8.

The company's stock was down $2.05, or 15.6 percent, to $11.08 per share just before closing on Tuesday.

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  1. With Pence running the ship good luck with a new government building on the site. He does everything on the cheap except unnecessary roads line a new beltway( like we need that). Things like state of the art office buildings and light rail will never be seen as an asset to these types. They don't get that these are the things that help a city prosper.

  2. Does the $100,000,000,000 include salaries for members of Congress?

  3. "But that doesn't change how the piece plays to most of the people who will see it." If it stands out so little during the day as you seem to suggest maybe most of the people who actually see it will be those present when it is dark enough to experience its full effects.

  4. That's the mentality of most retail marketers. In this case Leo was asked to build the brand. HHG then had a bad sales quarter and rather than stay the course, now want to go back to the schlock that Zimmerman provides (at a considerable cut in price.) And while HHG salesmen are, by far, the pushiest salesmen I have ever experienced, I believe they are NOT paid on commission. But that doesn't mean they aren't trained to be aggressive.

  5. The reason HHG's sales team hits you from the moment you walk through the door is the same reason car salesmen do the same thing: Commission. HHG's folks are paid by commission they and need to hit sales targets or get cut, while BB does not. The sales figures are aggressive, so turnover rate is high. Electronics are the largest commission earners along with non-needed warranties, service plans etc, known in the industry as 'cheese'. The wholesale base price is listed on the cryptic price tag in the string of numbers near the bar code. Know how to decipher it and you get things at cost, with little to no commission to the sales persons. Whether or not this is fair, is more of a moral question than a financial one.

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