INDIANAPOLIS — Electronic retailer Hhgregg reported net income of $6 million for the second quarter ended Sept. 30, or 16 cents per diluted share, compared with net income of $3.9 million, or 10 cents per diluted share, for the comparable prior-year period. According to the company, the increase in net income for the second quarter was the result of an increase in net sales due to the net addition of 35 stores during the past 12 months and a comparable-store sales increase of 1.5%.
Dennis May, president and CEO, commented, “We were pleased with our overall results during the quarter and our ability to deliver strong growth in both net sales and net income per diluted share. During the quarter, our strategic initiatives began to gain traction and generate favorable results. We launched our new website, gained market share in appliances, and expanded our assortment in the home office category, all while successfully opening 24 new stores in the Chicago and Miami markets. Additionally, we drove customer traffic and market share gains through increased promotional activity, primarily in the video category. While this resulted in pressure on our gross margin performance in the video category, this approach enabled us to generate positive comparable-store sales.”
According to the company, the increase in comparable-store sales resulted from increases in the appliance and the home office categories, partially offset by declines in the video and other categories.
Hhgregg, which operates more than 200 stores, is continuing its aggressive growth strategy by announcing plans to openbetween 20 to 25 new stores in fiscal year 2013. The store growth will be predominantly surrounding Hhgregg’s new regional distribution center that was opened in the Chicago, Illinois market this year. New markets for fiscal year 2013 are expected to include St. Louis, Missouri Milwaukee, Wisconsin and other locations in Illinois.
Dennis May stated, “We remain committed to growing our store base over the longer-term. Over the past three years, we have been able to take advantage of the soft real-estate market in areas such as Chicago, Philadelphia, Miami and Washington D.C. We have been very pleased with the consumer’s acceptance of our model in new and existing markets and remain excited about our future market expansions in achieving our long-term goal of becoming a national retailer.”
The company said it expects net income per diluted share for the full year to be within a range of $1.26 to $1.41, from a previous range of $1.20 to $1.35. The company expects a net sales increase of 20% to 25%, from a previous range of 15% to 20% and comparable-store sales to be flat to positive 3%, from a previous range of negative 3% to flat.