HHGregg Inc. shares plunged Wednesday after the Indianapolis-based appliance and electronics retailer said it expects to report a wider first-quarter loss because of weak sales in its video business. It also cut its full-year outlook.
Shares fell 38.5 percent Wednesday morning, or $4.44, to $7.10 each.
The Indianapolis-based company said Tuesday it expects a loss of between $5.7 million and $6.2 million, or 16 to 17 cents per share, for the quarter that ends June 30. That compares with a loss of $800,000, or 2 cents per share, in last year's first quarter.
HHGregg expects its quarterly revenue will increase nearly 14 percent, to $490 million, largely because it added 30 stores.
The earnings and revenue outlook is short of market expectations. Analysts polled by FactSet anticipated the company would post a loss of 4 cents per share on revenue of $509.5 million.
HHGregg CEO Dennis May said the quarter's sales results indicate the difficulty in the retail environment. The company is testing new products to help fill the void from sales declines in the video category and to help differentiate its business from big-box retail competitors.
The electronics business has been tough in recent years, with electronics specialists like HHGregg competing with big-box stores like Best Buy, online retailers like Amazon.com and discounters like Wal-Mart. Shoppers are focusing hard on price.
The company cut its full-year outlook, saying it expects to earn 90 cents to $1.25 per share for its 2013 fiscal year, down from its prior forecast of $1.12 to $1.27. Analysts forecast the company would earn $1.20 per share for the year.
Hhgregg said it expects its sales for the year will increase 3 percent to 6 percent, compared with prior guidance of gains of 9 percent to 12 percent.