Hhgregg delivers negative comp despite sales growth

INDIANAPOLIS— Hhgregg hasreported net income of $14.6 million for the fourth quarter ended March 31, or net income per diluted share of 36 cents, compared with net income of $10 million, or 25 cents per diluted share, for the comparable prior year period. Net sales for the period increased 21.5% to $507 million from $417 million, while same-store sales were down 10.8%

For the full year, the company reported net income of$48.2 million, or $1.19 per diluted share, compared with net income of $39.2 million, or $1.03 per diluted share, for the same period last year. Net sales fpr the full year increased 35.4% to $2.1 billion and comparable-store sales decreased 4%.

According to the company the decrease in comparable-store sales for the fourth quarter and fiscal year was partly due to a decline in the video category driven by lower than expected demand for emerging technologies.

Dennis May, president and CEO of the company, commented, “Despite industry headwinds and inclement weather around the Super Bowl selling period, we aggressively managed the business and delivered meaningful earnings growth in the fourth fiscal quarter. Strong inventory management and solid execution allowed us to increase gross margin by nearly 100 basis points while reducing per-store inventory levels by approximately 20% compared to the prior year. Merchandise margins were up across all key product categories and we remain pleased with our new stores sales productivity and our return on investment of our new stores. During the quarter, we also continued to strengthen our financial position by increasing our revolving credit facility’s borrowing capacity and extending its maturity until 2016 while also utilizing excess cash on hand to repay our term debt at the end of the year.”

May also commented, “Looking forward, we are determined to return our comparable-stores sales trends to positive. Therefore, during fiscal 2012, we plan to implement several key initiatives that we believe will better position us to achieve these goals. These initiatives include increasing our appliance market share, enhancing our multi-channel positioning via enhancing our web capabilities, growing our IT/mobile category, leveraging our leading position in large screen televisions and launching a new advertising campaign to drive enhanced consumer awareness.”