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HHGregg's stock swoons after quarterly report disappoints

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HHGregg Inc.'s stock price swooned in after-hours trading Monday and continued to fall Tuesday morning after the retailer reported quarterly sales that were short of analyst expectations.

HHGregg shares closed Monday at $15.61 each, a 52-week high, but had dropped 13 percent by Tuesday mid-morning, to $13.60 a share.

The Indianapolis-based retailer saw a big drop in earnings in its latest quarter on decreased sales, lower profit margins and higher advertising expenses, it said Monday.

The company reported earnings of $9.9 million, or 31 cents per share, for the fiscal fourth quarter, which ended March 31. That compared with $53.6 million, or $1.45 per share, in the same period a year ago.

Last year's quarter, however, included $39.6 million in earnings from a key-man life insurance payment. Adjusted earnings for the year-ago period were $14.5 million, or 39 cents per share.

Revenue for the latest quarter fell 2.6 percent, to $597.6 million.

Analysts had predicted quarterly revenue of $623 million and earnings of 29 cents per share.

Comparable store revenue, which measures sales at stores open more than a year, fell 9.8 percent.

HHGregg continued to see declines in TV sales and increases in appliance sales. About 43 percent of the company's sales came from appliances in the latest period, compared to 37 percent a year ago.  Roughly 36 percent of the retailer's sales came in the video category in the last quarter, down from 43 percent last year.

The retailer saw double-digit comparable-store sales decreases in cameras, camcorders and small electronics, partially offset by increases in sales from mattresses, furniture and fitness equipment.

CEO Dennis May told analysts that the company will continue to narrow its TV offerings to feature larger, pricer models while expanding its line of home-theater furniture options.

It also plans to increase its marketing efforts in the appliance category to coincide with improvement in the U.S. housing market.

In a conference call, May said the company plans to expand its lease-to-own program and offer additional credit options.

HHGregg predicted earnings per share for fiscal 2014 in the range of 75 cents to 90 cents and  sales growth in the range of 1 percent to 3.5 percent.

May said the company would limit store openings to five in the next fiscal year.
 

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  1. A Tilted Kilt at a water park themed hotel? Who planned that one? I guess the Dad's need something to do while the kids are on the water slides.

  2. Don't come down on the fair for offering drinks. This is a craft and certainly one that belongs in agriculture due to ingredients. And for those worrying about how much you can drink. I'm sure it's more to do with liability than anything else. They don't want people suing for being over served. If you want a buzz, do a little pre-drinking before you go.

  3. I don't drink but go into this "controlled area" so my friend can drink. They have their 3 drink limit and then I give my friend my 3 drink limit. How is the fair going to control this very likely situation????

  4. I feel the conditions of the alcohol sales are a bit heavy handed, but you need to realize this is the first year in quite some time that beer & wine will be sold at the fair. They're starting off slowly to get a gauge on how it will perform this year - I would assume if everything goes fine that they relax some of the limits in the next year or couple of years. That said, I think requiring the consumption of alcohol to only occur in the beer tent is a bit much. That is going to be an awkward situation for those with minors - "Honey, I'm getting a beer... Ok, sure go ahead... Alright see you in just a min- half an hour."

  5. This might be an effort on the part of the State Fair Board to manage the risk until they get a better feel for it. However, the blanket notion that alcohol should not be served at "family oriented" events is perhaps an oversimplification. and not too realistic. For 15 years, I was a volunteer at the Indianapolis Air Show, which was as family oriented an event as it gets. We sold beer donated by Monarch Beverage Company and served by licensed and trained employees of United Package Liquors who were unpaid volunteers. And where did that money go? To central Indiana children's charities, including Riley Hospital for Children! It's all about managing the risk.

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