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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowElectronics retailer HHGregg Inc. said it expects same-store sales to continue to drop sharply in the next few quarters as purchases of appliances and mattresses fall.
The company today reported an 8.3-percent drop in fiscal 2009 same-store sales, a key measure of health for retailers. HHGregg expects to report another 7-percent to 12-percent drop during the current fiscal year. Same-stores sales measure revenue at stores open at least a year.
But slower sales haven’t stopped the Indianapolis-based chain of 111 stores from ramping up plans to grab market share in the wake of Circuit City’s bankruptcy liquidation. HHGregg opened 20 new stores in fiscal year 2009 and said it plans to open 18 more this year, at a cost of up to $35 million.
And HHGregg remains profitable despite its rapid growth. The company earned $36.5 million, or $1.10 per diluted share, on sales of $1.4 billion, an increase of 11.1 percent, in fiscal 2009. It earned 42 cents per share in the fourth quarter alone, an increase of 31.3 percent.
“While the weak economic environment continued to weigh on consumer demand and spending levels, the closure of a major consumer electronics chain also led to some unique buying opportunities and market share increases for the company,” HHGregg President Dennis May said in a statement. “As we look ahead, we continue to plan the business around a difficult environment.”
The company gets about 50 percent of its sales from TVs and other video equipment, 35 percent from appliances and roughly 15 percent from audio, personal electronics, mattresses, computers and furniture. Some of the sales weakness in appliances and mattresses is being offset by strong sales of flat-panel TVs and computers, the company said.
HHGregg said it expects income per diluted share between 85 cents and $1 per share for fiscal 2010, a drop the company chalked up to difficult year-over-year comparisons, seasonal appliance sales and the absence of government stimulus checks that consumers spent in 2009.
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