hhgregg Announces Preliminary Third Fiscal Quarter Net Sales
January 09 2017 - 5:00PM
Business Wire
hhgregg, Inc. ("hhgregg" or the "Company") (NYSE:HGG) today
announced preliminary net sales results for the third fiscal
quarter ended December 31, 2016. 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 26, 2017.
Preliminary Net Sales Results
For the third fiscal quarter of 2017, the Company estimates net
sales to be approximately $453 million, a decrease of approximately
24% as compared to net sales of $593 million reported for the third
fiscal quarter of 2016. Third fiscal quarter comparable store sales
are estimated to have decreased approximately 22%, with the
appliance category estimated to have decreased approximately 4%,
the consumer electronics category estimated to have decreased
approximately 39%, the home products category estimated to have
decreased approximately 9%.
Robert Riesbeck, President and CEO, commented, “During the
quarter, we were challenged by the competitive pressures in the
market, specifically in consumer electronics as it is a larger mix
of our business during the holidays. Our transition to a new
distribution center also had a temporary negative impact on our
sales for the quarter. Although we are disappointed with our
overall performance during the quarter, we are pleased with our
investments made to shift our focus from consumer electronics to
appliances and furniture, through resetting store layouts, adding
Fine Lines departments and promotions focused on our appliance
business. The consumer electronics category was very competitive
again this holiday season. We made the strategic decision to
compete less in this category, particularly at the entry level
price points. Going forward, we will continue our focus on our
appliance and home products categories and will continue to
reposition our consumer electronics business to focus on the
premium models."
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,
2016. 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 in
the range of $7 million to $12 million and is currently finalizing
that determination.
Kevin Kovacs, SVP, Chief Financial Officer, commented, “While
the accounting related charge is significant, it is important to
note that this charge is non-cash. We continue to effectively
manage our working capital and liquidity and this will continue to
be a focus for the remainder of fiscal 2017.”
Conference Call to Discuss Full Operating Results for the
Third Fiscal Quarter 2017
hhgregg will be conducting a conference call to discuss
operating results for the three months ended December 31,
2016, on Thursday, January 26, 2017 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 220 stores in 19 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 2017
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 the Company's strategies and
initiatives, particularly in returning the Company to profitable
growth; the Company's ability to increase customer traffic and
conversion; competition in the retail industry; the Company's
ability to maintain a positive brand perception and recognition;
the Company's ability to attract and retain qualified personnel;
the Company's ability to maintain the security of customer,
associate and Company information; rules, regulations, contractual
obligations, compliance requirements and fees associated with
accepting a variety of payment methods; the Company's ability to
effectively achieve cost cutting initiatives; the Company's ability
to generate strong cash flows to support its operating activities;
the Company's relationships and operations of its key suppliers;
the Company's ability to generate sufficient cash flows to recover
the fair value of long-lived assets; the Company's ability to
maintain and upgrade its information technology systems; the
fluctuation of the Company's comparable store sales; the effect of
general and regional economic and employment conditions on the
Company's net sales; the Company's ability to meet financial
performance guidance; disruption in the Company's supply chain;
changes in trade regulation, 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 for fiscal year 2016 filed
May 19, 2016. 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/20170109006398/en/
hhgregg, Inc.Lance Peterson, VP, Finance & Planning,
317-848-8710investorrelations@hhgregg.com
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