Hhgregg cited poor performance in the consumer electronics and wireless categories for preliminary third quarter results which came in below its expectations. Hhgregg now expects its full fiscal year performance to miss previously stated guidance.
For the third fiscal quarter of 2014, Hhgregg estimates net sales to be approximately $707.1 million, a decrease of approximately 11.6% as compared to net sales of $799.6 million reported for the third fiscal quarter of 2013.
Third fiscal quarter same-store sales are estimated to have decreased approximately 11.2%, with the appliance category expected to have increased approximately 1.5%, the consumer electronic category expected to have decreased approximately 19.7%, the computing and wireless category expected to have decreased approximately 24.5%, and the home products category expected to have increased approximately 36.1%.
“Our sales of consumer electronics and computing and wireless products were significantly below our expectations during the quarter,” said president and CEO Dennis May. “Our third fiscal quarter, while solidly profitable, is expected to be materially below both our expectations and prior year for diluted earnings per share, driven by the net sales miss. Our holiday sales were significantly impacted by increased promotional offerings of televisions and tablet products across a variety of retail formats. While we are disappointed with these sales results, we made the strategic decision during the quarter not to fully participate in the heavily promotional environment. We did manage our inventory and liquidity position well, with total inventory per store below prior year levels.”
Hhgregg will provide additional information regarding its quarterly results and will update full year guidance when it reports its third fiscal quarter results on Jan. 30.