The Indianapolis-based appliance and electronics retailer said sales in stores open at least a year slumped 8.8 percent during the period ended Sept. 30.
Earnings per share of 10 cents fell short of the 12 cents anticipated by analysts surveyed by Thomson Financial.
Gregg reported a loss of 22 cents per share in its second quarter last year largely due to paying off debt incurred through its initial public offering in July 2007. Excluding that expense, Gregg earned 18 cents per share in the year-ago period.
Gregg also lowered its forecast for its fiscal year as financial uncertainty continues to roil the economy. Gregg now expects to earn 75 cents to 90 cents per share rather than its earlier guidance of $1.13 to $1.20.
Customer traffic dropped sharply in the final two weeks of September, making forecasting difficult, the company said.
"We will closely monitor our business and make prudent adjustments to our operating and expansion plans to drive shareholder value for the long term," CEO Jerry Throgmartin said in a statement.
Gregg said sales of flat-screen televisions failed to compensate for ongoing declines in sales of projection and tube televisions, bringing its overall video category to a near-standstill.
Sales of appliances, mattresses and personal electronics also declined.
Gregg shares fell 6 cents each this morning, to $4.83. The shares began trading in July last year at $14.55.