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Hhgregg Announces Preliminary Third Fiscal Quarter Sales And Earnings Results And Updates Fiscal 2013 Guidance

Stocks in this article: HGG

Indianapolis-based appliance and electronics retailer, hhgregg, Inc. (NYSE:HGG) today announced preliminary results for the third fiscal quarter ended December 31, 2012 and updated fiscal 2013 guidance (year ending March 31, 2013). The Company also announced details of its third fiscal quarter earnings conference call.

For the third fiscal quarter of 2013, the Company estimates net sales to be approximately $799.6 million, a decrease of approximately 3.6% as compared to net sales of $829.5 million reported for the third fiscal quarter of 2012. Third fiscal quarter comparable store sales are estimated to have decreased approximately 9.7%, with the video category expected to have decreased approximately 24.6%, the appliance category expected to have increased approximately 6.1%, the computing and mobile phones category expected to have increased approximately 16.2%, and the other category expected to have decreased approximately 23.7%. The Company expects net income of approximately $17.4 million, or $0.51 per diluted share, for the third fiscal quarter of 2013, compared with net income of $22.5 million, or $0.60 per diluted share, for the comparable prior year period. Third fiscal quarter 2013 earnings were negatively impacted by lower than expected sales performance in the video category. Third fiscal quarter 2013 results include a $0.5 million ($0.3 million after-tax) charge related to impairment for one store. Net income, as adjusted for this item, for the three months ended December 31, 2012 is expected to be approximately $17.7 million, or $0.52 per diluted share, as adjusted, a decrease of approximately 21.3% in adjusted net income when compared to the prior year period.

Dennis May, President and CEO commented, “Fundamental shifts across the video category continued to pressure our business during our third fiscal quarter, and we were disappointed in our video performance. Declining industry demand for flat screen televisions along with broadened distribution of large-screen televisions negatively impacted overall store traffic and video category sales. During the quarter, we placed less emphasis on lower-end promotional televisions to bolster gross margin rates, which led to an increase in video category and total company gross margin rates. Throughout the quarter, we continued to test new product categories and consumer financing options that further diversify our business and reduce our dependence on new product innovations in the video sector."

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