Skip to main content

Holidays not so merry for HHgregg

1/6/2015

E-commerce sales at HHgregg surged during what was an otherwise unhappy holiday season that saw sales fall 6 percent and the company's share price tumble after it withdrew a 2015 profit forecast.


For the third quarter, the company estimated net sales of $666 million, a decrease of approximately 6% as compared to the prior year quarter. Same store sales for the third quarter decreased approximately 6%, with the appliance category relatively flat. However, the company estimated that its e-commerce sales were up approximately 59% for the third quarter.


“The company continues to execute on its strategic initiatives focused on transforming our sales mix. The company has made progress improving on our previous quarters’ sales trends, in particular in the consumer electronics and appliance business. We are pleased with our market share numbers in ultra-high definition televisions along with the progress we are making in the appliance category,” said Dennis May, president and CEO of HHgregg. “The computer and tablet industry continues to be negatively impacted by declining consumer demand. Additionally, we made a decision not to participate in certain areas of the computer and tablet business that were not profitable. The company remains active in executing our transformation strategies, and we are confident in our ability to make meaningful improvements in the coming fiscal year.”


The Indianapolis-based company, which said estimated sales dropped 35% in the computer and tablet category, also withdrew its earnings outlook for its coming fiscal year, citing factors such as the decline in operating performance at some locations and underperforming markets.


Hhgregg had previously expected positive earnings before interest, taxes, depreciation and amortization and same-store sales to drop in the mid-single to high-single digits. Analysts polled by Thomson Reuters had predicted a 5% decrease in revenue.


Last April, the company said that it would exit its contract-based mobile phone business with the aim of aligning its operations more closely with management’s long-term strategic goals.


X
This ad will auto-close in 10 seconds