HHGregg lives up to predictions with dismal quarter

As expected, retailer HHGregg experienced a tough holiday season, according to quarterly financial results released Thursday.

The Indianapolis-based company announced Jan. 9 that it was expecting a big drop in revenue during its fiscal third quarter ended Dec. 31, and it was right on with its estimate.

The appliance and electronics store chain had revenue of $452.8 million in the period, down 24 percent from the $593 million it reported in the third quarter of the previous year.

The retailer took a whopping loss of $58.3 million, or $2.10 per share, in the quarter, more than double the loss of $26.9 million, or 97 cents per share, it took in the third quarter of the previous year.

HHGregg has suffered losses in 13 straight quarters and analysts are beginning to question whether the company can survive.  

Comparable store sales—an important sales category for retailers that measures revenue at stores open for at least 14 months—decreased 22 percent.

HHGregg CEO Robert Riesbeck said the consolidation of two existing distribution centers into one new distribution center led to a one-time loss of $20 million to $25 million in the period.

Consumer electronics sales, which make up 40 percent of HHGregg’s sales, dropped almost 39 percent in the quarter. Appliance sales dipped 4.2 percent and home-products sales decreased 9 percent.

“During the quarter, we were challenged by the competitive pressures in the market, specifically in consumer electronics as it is a larger mix of our business during the holidays,” HHGregg CEO Robert Riesbeck said. “Although we are disappointed with our overall performance during the quarter, we are pleased with our investments made to shift our focus to appliances and furniture, through resetting store layouts, adding Fine Lines departments and promotions focused on our successful appliance business.”

Company shares closed Wednesday at 73 cents each and dropped to 60 cents Thursday morning. A year ago, they were trading at $1.93.

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