hhgregg Announces Preliminary Third Fiscal Quarter Sales
January 06 2015 - 8:00AM
Business Wire
hhgregg, Inc. ("hhgregg" or the "Company") (NYSE:HGG) today
announced preliminary sales results for the third fiscal quarter
ended December 31, 2014. The Company also announced details of its
third fiscal quarter earnings conference call.
For the third fiscal quarter of 2015, the Company estimates net
sales to be approximately $666 million, a decrease of approximately
6% as compared to net sales of $707 million reported for the third
fiscal quarter of 2014. Third fiscal quarter comparable store sales
are estimated to have decreased approximately 6%, with the
appliance category estimated to be relatively flat, the consumer
electronics category estimated to have decreased approximately 4%,
the home products category estimated to have decreased
approximately 9%, and the computer and tablet category estimated to
have decreased approximately 35%. The company estimates that its
e-commerce business comparable sales were up approximately 59% for
the fiscal third quarter.
Dennis May, President and CEO commented, “The Company continues
to execute on its strategic initiatives focused on transforming our
sales mix. The Company has made progress improving on our previous
quarters’ sales trends, in particular in the consumer electronics
and appliance business. We are pleased with our market share
numbers in 4k ultra-high definition televisions along with the
progress we are making in the appliance category. The computer and
tablet industry continues to be negatively impacted by declining
consumer demand. Additionally, we made a decision not to
participate in certain areas of the computer and tablet business
that were not profitable. The Company remains active in executing
our transformation strategies, and we are confident in our ability
to make meaningful improvements in the coming fiscal year.”
FY 2015 Outlook
The Company expects to incur non-cash charges related to a
valuation allowance for its deferred tax assets and impairment of
certain stores in the quarter ended December 31, 2014. In
accordance with Accounting Standards Codification ASC 740, the
Company is required to reduce the deferred tax asset if it is more
likely than not that some portion of or all of the deferred tax
asset will not be realized. Also in accordance with Accounting
Standards Codification 360, factors including the decline in
operating performance at certain locations, led the Company to
perform an additional review for impairment of long lived assets.
The impairment charge is based on current trends in certain
under-performing markets and the lack of visibility to the
recoverability of the assets associated with those stores. The
Company does not have current plans to close any of its store
locations. The Company expects the combined impact of these
non-cash pre-tax charges to be $60 - $70 million and is currently
in the process of finalizing that determination. Because of these
charges coupled with uncertain current market conditions, the
Company is withdrawing its fiscal year 2015 EBITDA outlook at this
time.
Robert Riesbeck, CFO commented, “While the accounting related
charges are significant, it is important to note that these charges
are non-cash items. The Company finished the quarter in a strong
liquidity position with a cash balance of approximately $27 million
and no outstanding borrowings.”
All figures in this release are preliminary and remain subject
to the completion of normal quarter-end accounting procedures and
adjustments, which could result in changes to these preliminary
results. hhgregg will provide additional information regarding its
quarterly results when it reports its third fiscal quarter results
on January 29, 2015.
Conference Call to Discuss Full Operating Results for the
Third Fiscal Quarter 2015
hhgregg will be conducting a conference call to discuss
operating results for the three months ended December 31,
2014, on Thursday, January 29, 2015 at 9:00 a.m. (Eastern
Time). Interested investors and other parties may listen to a
simultaneous webcast of the conference call by logging onto
hhgregg's website at www.hhgregg.com. The on-line replay will
be available for a limited time immediately following the call. The
call can also be accessed live over the phone by dialing
(877) 304-8963. Callers should reference the hhgregg earnings
call.
About hhgregg
hhgregg is an appliance, electronics and furniture retailer that
is committed to providing customers with a truly differentiated
purchase experience through superior customer service,
knowledgeable sales associates and the highest quality product
selections. Founded in 1955, hhgregg is a multi-regional retailer
with 228 stores in 20 states that also offers market-leading global
and local brands at value prices nationwide
via hhgregg.com.
Safe Harbor Statement
The following is a Safe Harbor Statement under the Private
Securities Litigation Reform Act of 1995:
This press release includes forward-looking statements,
including with respect to the Company's third quarter results and
financial performance for fiscal 2015, ability to manage costs,
innovation in the video industry, the impact and amount of non-cash
charges, and shifts in the Company's sales mix. hhgregg has based
these forward-looking statements on its current expectations,
assumptions, estimates and projections. While hhgregg believes
these expectations, assumptions, estimates and projections are
reasonable, these forward-looking statements are only predictions
and involve known and unknown risks and uncertainties, many of
which are beyond its control. These and other important factors may
cause hhgregg's actual results, performance or achievements to
differ materially from any future results, performance or
achievements expressed or implied by these forward-looking
statements. Some of the key factors that could cause actual results
to differ from hhgregg's expectations are: the ability to
successfully execute its strategies and initiatives, particularly
in the sales mix shift and consumer electronics category; its
ability to maintain a positive brand perception and recognition;
the failure of manufacturers to introduce new products and
technologies; competition in existing, adjacent and new
metropolitan markets; its ability to maintain the security of
customer, associate and Company information; its ability to roll
out new financing offers to customers; its ability to effectively
manage and monitor its operations, costs and service quality; its
ability to maintain and upgrade its information technology systems;
its ability to maintain and develop multi-channel sales and
marketing strategies; competition from internet retailers; its
ability to meet delivery schedules; the effect of general and
regional economic and employment conditions on its net sales; its
ability to attract and retain qualified sales personnel; its
ability to meet financial performance guidance; its ability to
generate sufficient cash flows to recover the fair value of
long-lived assets and recognize deferred tax assets; its reliance
on a small number of suppliers; its ability to negotiate with its
suppliers to provide product on a timely basis at competitive
prices; changes in legal and/or trade regulations, currency
fluctuations and prevailing interest rates; and the potential for
litigation.
Other factors that could cause actual results to differ from
those implied by the forward-looking statements in this press
release are more fully described in the "Risk Factors" section in
the Company's Quarterly Report on Form 10-Q filed on July 31, 2014
and the Annual Report on Form 10-K filed May 20, 2014. Given
these risks and uncertainties, you are cautioned not to place undue
reliance on these forward-looking statements. The forward-looking
statements included in this press release are made only as of the
date hereof. hhgregg does not undertake, and specifically declines,
any obligation to update any of these statements or to publicly
announce the results of any revisions to any of these statements to
reflect future events or developments.
hhgregg, Inc.Andy Giesler, Senior Vice President of Finance,
317-848-8710investorrelations@hhgregg.com
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