HHGregg posts steep quarterly loss on falling sales

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Sales at HHGregg Inc. slid in its second quarter, but the struggling Indianapolis-based retail chain’s renewed focus on appliances began showing better results.

The Indianapolis-based appliance and electronics retailer on Tuesday reported fiscal second quarter sales of $454.5 million in the period ended Sept. 30, down 6.6 percent from the $486.9 million it reported in the year-ago period. The year-over-year sales drop was worse than the 3.8 percent decline HHGregg reported in the same quarter last year.

Revenue fell short of the average estimate of $459.9 million by analysts.

HHGregg lost $18.4 million, or 66 cents per share in the quarter, compared with a loss of $10.1 million, or 37 cents per share, in the same period of 2015. The loss marked the 12th straight quarter in which the company failed to turn a profit.

Losses, adjusted for non-recurring costs and asset impairment costs, came to 51 cents per share, missing an estimate of three analysts surveyed by Zacks Investment Research, who predicted an adjusted loss of 39 cents per share.

Comparable store revenue, which measures sales at stores open at least 14 months, dropped 6.4 percent, but same-store sales of appliances in the quarter increased 5.7 percent. Sales of consumer electronics, however, fell 25.1 percent.

HHGregg operated 220 stores in the most recent quarter, six fewer than the previous three-month period. It did not open any new stores.

HHGregg’s strategy to shift more of its sales mix to appliances and away from less profitable consumer electronics seems to be working.

Appliances accounted for 63 percent of sales in the quarter, up from 56 percent in the second quarter of 2015. Consumer electronics accounted for 30 percent of sales, down from 38 percent a year ago. Home products comprised 7 percent of sales, up slightly from 6 percent last year.

Online sales improved 35.5 percent over the year-ago quarter, HHGregg said.

Company shares closed Monday at $1.74 each, down 52.5 percent since the start of the year. They were down 23 percent Tuesday morning, to $1.33 each.

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