Hhgregg ends the year on a sour note

Hhgregg's holiday disaster was confirmed Thursday when the struggling retailer officially posted a loss of $26.9 million in its fiscal third quarter.



The company said that for the third quarter ended Dec. 31, net sales decreased 10.9% to $593 million, compared to the prior year third quarter.



Same-store sales decreased 10.8%. The same-store sales decline was most pronounced in the computer and tablet category where comps declined an estimated 35%. Comps in the home products category increased 3%, but that wasn’t enough to offset declines of 8% in consumer electronics and 10% in appliances. Gross margin decreased to 26.1%, compared to 27% in the prior year third quarter. Net loss per diluted share was 97 cents per share.



“As we previously reported, we did not meet our overall expectations for the quarter due to the competitive pressures in the market, but continue to see the impact from our strategic investments in our transformation plan," said Dennis May, president and CEO. "Year to date we have now realized $48.9 million of cost savings and remain on track to meet or exceed our plan to save $50 million in fiscal 2016. These cost savings efforts have allowed us to generate $4.0 million more of Adjusted EBITDA fiscal year to date compared to the comparable prior year period and we remain confident we will generate positive adjusted EBITDA for the fiscal year. We also continue to focus on our revenue generation initiatives, specifically around Fine Lines expansion, furniture growth and premium televisions, as we finish fiscal 2016 and enter into fiscal 2017. "



Hhgregg launched an overhaul in 2014 that included a national ad campaign and updated logo. It's also trying to make inroads into the home furnishings business, a category that saw sales increase an estimated 16% in the current quarter. But shares of the retailer have dropped 64% from a year ago.



Hhgregg currently has 227 stores in 20 states.