HHGregg reports 11 percent drop in quarterly sales

HHGregg Inc. on Thursday morning said store sales fell 11 percent during its latest quarter, which included the important holiday shopping season.

The drop in sales was in line with preliminary financial results the Indianapolis-based electronics and appliance retailer announced early in the month.

Sales for its fiscal third quarter ended Dec. 31 were $593.2 million compared with $665.6 million in the same period of the prior year.

The company lost $26.9 million, or 97 cents per share, in the quarter, down from $86.7 million, or $3.10 per share, in the third quarter of the previous year. Management said the smaller loss was due largely to $48.9 million in cost savings realized through the first three quarters.

The savings, however, were partially offset by $900,000 in fees associated with the higher cost of offering customers extended special financing options and the increased use of the company’s private label credit card.

Adjusted earnings per share came in at a loss of 17 cents, topping analyst expectations by 2 cents. Revenue was slightly above analyst predictions of $592.7 million.

Sales for store locations open at least a year—a key metric in retailing known as comparable-store sales—also fell 11 percent, with appliance sales down 10.4 percent and consumer electronics sales off 7.9 percent. Computers and tablet sales dropped 35.2 percent.

HHGregg has opened only one new store in the past year while closing two.

“As we previously reported, we did not meet our overall expectations for the quarter due to the competitive pressures in the market, but continue to see the impact from our strategic investments in our transformation plan,” HHGregg CEO Dennis May said in a written statement.

The transformation includes the company’s foray into higher-end appliances and televisions, in addition to home furnishings.

HHGregg operates 227 stores in 20 states. In early-morning trading Thursday, the company’s stock was down 10 percent, to $1.89.