Net Loss Multiplies for hhgregg in First Quarter
INDIANAPOLIS-Rising expenses offset a fairly healthy gain in sales to produce a net loss of $5.7 million for specialty retailer hhgregg in its first quarter, compared to a net loss of $761,000 for its first quarter of last year.
Dennis May, hhgregg president and CEO, said the quarter "proved to be more challenging than anticipated, with sales and earnings coming in below our original expectations." While net sales did climb 13.5 percent to $489.9 million, same-store sales fell 5.1 percent. Sales fell sharply in the audio, furniture and accessories, mattresses, personal electronics and video categories, while sales in appliances rose.
Gross margin fell 30 basis points to 29.9 percent. Selling, general and administrative expenses jumped 15 percent in dollars and 40 basis points as a percentage of sales, to 24.3 percent. hhgregg also reported significant increases in expenses related to advertising, depreciation and amortization.
May said hhgregg has reacted with efforts to improve its cost structure. "We are looking for new ways to enhance our store sales productivity through the testing of new products and merchandise that leverage our consultative sales force, delivery and installation network, and private-label consumer credit-card offering," he said. He added that subsequent fiscal quarters will "benefit from our cost-cutting measures."