hhgregg Net Falls 20 Percent in Second Quarter
INDIANAPOLIS-Net income for mattress/appliance retailer hhgregg dropped 20 percent in its fiscal second quarter, to $3.4 million.
The bottom line suffered in spite of a 45 percent increase in net sales to $480.9 million in the quarter, which ended Sept. 30, 2010. Part of the quarterly numbers were a 41 percent jump in selling, general and administrative expenses and a 46 percent rise in cost of goods sold--the latter of which led to an 80 basis-point drop in gross margin to 30 percent. hhgregg also reported a 77 percent climb in net advertising expense.
Dennis May, hhgregg's president and chief executive officer, said the second quarter was "a reminder of the sensitive nature of the economic recovery and the consumer's purchasing capacity." However, May professed himself pleased that the retailer registered "continued market-share gains in both new and existing markets."