HHGregg reports higher profit, lower same-store sales

Soft demand for pricier televisions and appliances led Indianapolis-based HHGregg Inc. to slash its fiscal 2011 outlook on Tuesday after missing quarterly sales estimates.

The company’s profit in its fiscal third quarter increased 18.4 percent from the same period in 2009 due in part to the opening of four new stores.

For the quarter ended Dec. 31, HHGregg earned $26.9 million, or 66 cents per share, compared with $22.7 million, or 57 cents per share, in the 2009 period.

But same-store sales, which reflect revenue from stores open at least a year, fell 6.2 percent. Overall revenue in the quarter increased 30.6 percent, to $653.7 million, missing analysts’ estimates of $654.6 million.

“Through our fourth fiscal quarter to date, we have continued to see challenging top-line results due to industry headwinds along with experiencing the negative effects of inclement weather across our chain during our important Super Bowl selling season,” said Jeremy Aguilar, HHGregg’s chief financial officer, in a prepared statement.

For fiscal 2011, the company now forecasts profit in a range of $1.10 a share to $1.15 a share, down from its previous outlook of $1.15 to $1.23. Same-store sales are expected to fall 4 percent to 5 percent, worse than the prior estimate of 1 percent to 3 percent.

The company still remains on track to open a total of 43 new stores in fiscal 2011.

“We continue to be pleased with our new-store sales productivity and our team’s execution in both new and existing markets,” HHGregg CEO Dennis May said in a statement. “As a result, we remain confident in our ability to continue to gain market share as we enter new markets and move closer to becoming a national retail chain.”

HHGregg operates 174 stores in 15 states.

Company shares opened trading Tuesday morning at $18.67 each. By late morning, they had fallen more than 6 percent, to $17.51.

 
 

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