hhgregg Q3 Net Falls 71 Percent as Sales Plummet
INDIANAPOLIS-With sales falling in an exceedingly promotional environment, hhgregg's third-quarter net income fell 71 percent to $5 million.
Net sales in the quarter, which ended on Dec. 31, dropped 11.6 percent to $707.1 million, including a decrease of 11.2 percent in same-store sales. Dennis May, hhgregg's president and CEO, said third-quarter sales of consumer electronics and computing and wireless products were way below the company's expectations.
"The broadening distribution and heightened promotional nature of the consumer-electronics category during the holiday period reinforces our strategic decision to continue transforming our business toward a broader assortment of home products, including appliances and home furnishings," May said. He added that the third quarter was the 10th consecutive quarter of same-store sales increases of appliances for hhgregg.
Gross margin in the quarter dropped 50 basis points to finish at 26.8 percent. Selling, general and administrative expenses declined 5 percent in dollars but gained 130 basis points as a percentage of sales, to 18.7 percent.
May said hhgregg will continue to invest in driving profitable sales and customer traffic in home furnishings, "and management remains committed to transforming the company's sales mix and broadening its reach to both new and existing customers."