hhgregg Net Down 16 Percent in Third Quarter
INDIANAPOLIS-Third-quarter net income for hhgregg fell an estimated 16 percent to $22.5 million, according to a preliminary report from the specialty retailer.
The decline in the bottom line occurred in spite of a healthy sales gain of 27 percent to $829.5 million in the quarter, which ended on Dec. 31. That increase included a 3.9 percent rise in same-store sales. However, the retailer said lower-than-expected margins in video-products sales and a jump in advertising spending combined to reduce net profit in the quarter.
Dennis May, hhgregg's president and CEO, noted that the video category experienced heavy promotional activity throughout the quarter, which cut into both margins and average selling prices. In addition, hhgregg boosted advertising spending to increase market share, launch its mobile category and introduce its new Web platform, which is designed to enhance its multichannel strategy.