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Hhgregg fourth-quarter sales take hit from extreme weather

Extreme weather hurt Hhgregg’s sales performance in the fourth quarter ended March 31. During the quarter the company also exited the contract-based mobile phone business.

Net sales are estimated to be $538.3 million, a decrease of approximately 9.9% as compared to net sales of $597.6 million reported for the fourth fiscal quarter of 2013. Fourth fiscal quarter comparable store sales are estimated to have decreased approximately 9.9%.

“We faced a number of headwinds during the quarter, which led to disappointing financial results,” said president and CEO Dennis May. “Extreme weather in January, February and the beginning of March negatively impacted traffic and operating performance in the majority of our stores, particularly those located in the Midwest and Mid-Atlantic regions, where the weather was the most severe. While we are disappointed in our preliminary results, we remain focused on executing our strategic initiatives to transform the business by refining our merchandise assortment, improving our customer shopping experience, expanding our credit offerings and enhancing our service capabilities.”

All was not a cause for disappointment, however. May added that he was pleased with the progress the retailer has made in the appliance category.

“This quarter marks our 11th consecutive quarter of comparable store increases in appliances,” May said.

May is also optimistic about the video industry, which he anticipates will have a stronger innovation cycle in the coming year. If so, it should drive higher ASPs in the category as consumer preference shifts toward new products such as Ultra HD TV’s and larger screen sizes.

The transition from one furniture brand to five brands, May added, is a strategy that he expects will strengthen the retailer’s assortment of merchandise in the home products category.

“We expect to have these new products in our stores by early summer,” he said.