hhgregg Announces Preliminary Third Fiscal Quarter Net Sales
January 06 2016 - 7:00AM
Business Wire
hhgregg, Inc. ("hhgregg" or the "Company") (NYSE:HGG) today
announced preliminary net sales results for the third fiscal
quarter ended December 31, 2015. The Company also announced
information on certain non-cash charges and details of its third
fiscal quarter earnings conference call.
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 28, 2016.
Preliminary Net Sales Results
For the third fiscal quarter of 2016, the Company estimates net
sales to be approximately $593 million, a decrease of approximately
11% as compared to net sales of $666 million reported for the third
fiscal quarter of 2015. Third fiscal quarter comparable store sales
are estimated to have decreased approximately 11%, with the
appliance category estimated to have decreased approximately 10%,
the consumer electronics category estimated to have decreased
approximately 8%, the home products category estimated to have
increased approximately 3%, and the computer and tablet category
estimated to have decreased approximately 35%.
Dennis May, President and CEO, commented, “During the quarter,
we were challenged by the competitive pressures in the market.
Although we are disappointed with our overall performance during
the quarter, we are pleased with many of the strategic investments
we have made for our transformation. Our investment in the
furniture category drove an increase of approximately 16% in
furniture comparable store sales during the quarter. Our focus on
large-screen, premium video drove 59% of our TV sales in the
quarter to be 4K TVs, up from 50% in the second fiscal quarter. We
are also pleased with the continued cost savings initiatives and
remain on track to achieve more than $50 million of cost savings in
fiscal 2016. We remain confident, in line with our prior
expectations, that we will generate positive adjusted EBITDA for
the fiscal year.”
Non-Cash Asset Impairment Charge
The Company expects to incur a non-cash charge for asset
impairment of certain locations in the quarter ended December 31,
2015. 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 locations. The
Company expects the impact of this non-cash pre-tax charge to be
$15 million to $25 million and is currently in the process of
finalizing that determination.
Robert Riesbeck, CFO, commented, “While the accounting related
charge is significant, it is important to note that this charge is
non-cash. We finished the quarter in a strong liquidity position
with a cash balance of approximately $7 million and no outstanding
borrowings and continue to efficiently manage our working capital.
Our inventory balance as of December 31, 2015 was more than $40
million lower than the inventory balance at December 31, 2014.”
Conference Call to Discuss Full Operating Results for the
Third Fiscal Quarter 2016
hhgregg will be conducting a conference call to discuss
operating results for the three months ended December 31,
2015, on Thursday, January 28, 2016 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
currently with 227 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 financial performance,
ability to manage costs, ability to execute the Company's 2016
initiatives, 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 Annual Report on Form 10-K filed May 15,
2015. 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.
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version on businesswire.com: http://www.businesswire.com/news/home/20160106005542/en/
hhgregg, Inc.Director, Finance & Investor RelationsLance
Peterson, 317- 848-8710investorrelations@hhgregg.com
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