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HHGregg shares slide on lower earnings outlook

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Shares of HHGregg Inc. fell Thursday after the Indianapolis-based appliance and electronics retailer lowered its earnings outlook, citing weak demand for new video technology products.

By 12:15 p.m., the company’s stock price had tumbled nearly 8 percent to $20.15.

Sales of LED and 3-D televisions were less than expected while sales of lower-priced TVs were higher than anticipated, which hurt profit margins, HHGregg President and CEO Dennis May said in a written statement.

“While we are pleased with our overall sales and market share gains in the video category, our mix of video product was different than our expectations going into the holiday selling season,” he said.

The company now expects profit of $1.15 to $1.23 during fiscal 2011, which ends in March. That's well below its earlier outlook of $1.30 to $1.45 per share.

Analysts had expected $1.31 in earnings per share.

The company expects revenue to increase 38 percent to 40 percent from 2010, less than the 40 percent to 45 percent rise it had predicted. Analysts expect revenue of $2.18 billion, an increase of nearly 43 percent from 2010 revenue of $1.53 billion.

For the fiscal third quarter, which ended Dec. 31, HHGregg expects revenue to increase 30.6 percent, to $653.7 million. But same-store sales during the period are expected to slide 6.2 percent.

HHGregg will report fiscal third-quarter earnings on Feb. 8.

In November, the company said its second-quarter profit fell 20.4 percent from a year earlier despite a big rise in revenue brought on by expansion.

HHGregg expects to open between 35 and 45 new stores in fiscal 2012. Cities targeted are Chicago, Miami and Pittsburgh. It currently has 173 stores in 15 states.

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  • It's not weak demand..
    HH Gregg is the worst electronics retailer out there now that Circuit City is gone. They were bad 10 years ago and still are. I cant believe anyone would even shop there. I give them 2 years and they will either be bought up or belly up.
  • agreed
    I couldn't agree with you more meghan, hhgregg has the worst customer service on any retailer period. I bought a television and my sales person set up my delivery incorrectly, after an entire day of phone calls and a personal visit to the store I was made to wait for a manager for 45 minutes after coming in, I was then met by a general manager, jeff clark who only tried to sell me a dirctv package. Very shady and greasy.
  • hhgregg thinks there customers are nothing
    It is a part of hhgregg's training at their headquarter store to threaten new employees with the phrase "if you don't meet your sales goals you will be demoted to customer" everyday on the sales floor is a day on the chopping block. Hhgregg employees are on a 7.50 dollar an hour draw. Meaning if they sell nothing in an eight hour shift then they owe hhgregg the entire days wages back. They hire people with no experience in electronics, like myself, they then spend 2 weeks training about sales techniques and preach that if the customer walks it is your fault for not making the sale. These sales techniques leave no time for a sales associate to care about any customers problem from the past at all. Even the most sucessful salesman at hhgregg are basically cut-throat crooks, but if you don't want to talk to them that is ok The sales managers are there in ties and suits to "close" you on the sale
  • Don't blame demand
    It's not the demand falling as much as the well documented fact that HH Gregg customer service is horrendous at best, non-existent the remainder. They sell substandard products, do not correct issues in a timely manner, and obviously don't care about customers. They should not be in business at all with their track record.

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