hhgregg Net Jumps 53 Percent in Second Quarter
Posted on November 2, 2011 by
INDIANAPOLIS-Second-quarter net income for hhgregg skyrocketed 53 percent to $6 million as the specialty retailer rode on the back of a hefty 29 percent sales gain.
That increase took hhgregg to $618.6 million in net sales for the quarter, which ended on Sept. 30. The leap in sales came about largely due to the net addition of 35 stores over the previous 12 months, bringing the chain's total to 204. Same-store sales for hhgregg rose by a less spectacular 1.5 percent in the quarter.
The bottom line was also bolstered by the company's ability to keep expenses relatively check. While selling, general and administrative expenses rose 20 percent in dollars, they fell 150 basis points as a percentage of sales to 20.6 percent. Gross margin declined 140 basis points to 28.6 percent.
Dennis May, president and CEO, said hhgregg's strategic initiatives "began to gain traction and generate favorable results" in the quarter. These initiatives included launching the retailer's new website, increasing market share in appliances and expanding its assortment in the home-office category. "Additionally, we drove customer traffic and market-share gains through increased promotional activity, primarily in the video category," May said.