hhgregg Loss Grows in Second Quarter
November 8, 2016,
INDIANAPOLIS-With sales on a slide, hhgregg posted a net loss of $18.4 million in its fiscal second quarter, compared to a net loss of $10.1 million in the second quarter of last year.
Net sales fell 6.6 percent to $454.5 million, including a decrease of 6.4 percent in same-store sales. Much of the drop in sales occurred in the consumer electronics category, whose same-store sales plummeted by 25.1 percent.
Same-store sales for appliances (whose share of hhgregg’s second-quarter sales rose from 56 percent to 63 percent) rose 5.7 percent, while same-store sales of home products (which include furniture and mattresses) were down 0.7 percent. Online sales rose 35.5 percent.
Also affecting the bottom line, selling, general and administrative expenses rose 3.7 percent in dollars and 257 basis points as a percentage of sales, to 25.9 percent. Gross margin was up 21 basis points to 28.7 percent. The company also reported a $1.4 million noncash charge for asset impairment, due to an evaluation of stores for which sales and profits had declined, which also hurt the overall bottom line.
While the red ink grew deeper in the quarter, Bob Riesbeck, hhgregg’s CEO, looked up on it as a period of further progress. “In the second fiscal quarter we continued to implement our strategic plan and to position hhgregg as the best option to purchase appliances, furniture and premium consumer electronics,” Riesbeck said. “Our focus on the customer experience continues to reflect positively as we again saw increases in customer satisfaction scores. We are energized by the upcoming holiday season as we look to maintain our steady progress.”