As expected, HHGregg Inc. on Tuesday morning reported disappointing fourth-quarter sales that resulted in a $7.2 million loss for the Indianapolis-based appliance, electronics and furniture retailer.
The company warned last month in a preliminary report that it anticipated weak sales in the fiscal fourth quarter that ended March 31.
HHGregg reported a loss of $7.2 million, or 25 cents per share, in the quarter, compared with a profit of $9.9 million, or 31 cents per share, in the same period of 2013.
Revenue in the quarter slid 9.9 percent, to $538.3 million. Sales for locations open at least a year—a key metric in retailing—also fell nearly 10 percent.
HHGregg CEO Dennis May attributed the disappointing sales to continued volatility in the consumer electronics segment, in addition to extreme winter weather that reduced foot traffic in its stores, mainly those in the Midwest and Mid-Atlantic regions.
“As we discussed in our pre-release, we faced a number of headwinds during the quarter, which led to disappointing financial results,” May said in a written statement.
Despite the company’s challenges, HHGregg managed to report a bit of positive news: 11 consecutive quarters of same-store sales increases in the appliance category.
Sales of appliances in the latest quarter accounted for 48 percent of the company’s sales compared with 43 percent of sales in the year-ago period. Conversely, electronics dropped from 42 percent to 38 percent of sales, and computers and mobile phones fell from 10 percent to 8 percent.
The dip in sales of electronics is the result of HHGregg’s strategy to offer fewer entry-level televisions and instead focus on more expensive and profitable models.
For the entire fiscal year, HHGregg reported profit of $200,000, or 1 cent per share, compared with a profit of $25.4 million, or 74 cents per share, in the previous year.
Annual revenue fell 5.5 percent, to $2.3 billion.
Given initiatives the company is undertaking to improve sales, combined with the volatility of the consumer electronics industry, HHGregg said that it will not provide earnings guidance for fiscal 2015.
Also on Tuesday, HHGregg announced that it intends to repurchase $40 million of company stock in the next year following its repurchase of $49 million of stock in the last fiscal year.
HHGregg said it expects to open two to four stores in fiscal 2015. It has 228 locations in 20 states.
Shares in HHGregg rose 5 percent Monday before the earnings report, to $8.91 each. The stock is down 36 percent since the beginning of the year.