Retailer hhgregg, Inc. reported its tenth consecutive quarter of positive comparable store sales for appliances. But, in the most recent quarter, sales of consumer electronics and computing and wireless products were well below expectations.
hhgregg net sales decreased 11.6% in the third quarter of its current fiscal year (fiscal year 2014) to $707.1 million, from 799.6 million in the previous third quarter. Comparable store sales decreased 11.2% in the quarter.
hhgregg's fiscal third quarter ended on Dec. 31, 2013.
Net income in the third quarter was $5.0 million, compared to $17.4 million in the third quarter of the previous fiscal year.
In the first nine months of the current fiscal year the retailer had net income of $7.5 million, down from $15.4 million in the first nine months of the previous fiscal year.
Adjusted net income in the third quarter was $5.2 million; adjusted net income for the nine-month period was $7.7 million.
The decrease in net income for the most recent third quarter came about largely from a comparable store sales decrease of 11.2% and a decrease in gross margin. The decrease in net income for the nine-month period was largely from a comparable store sales decrease of 6.4% and a decrease in gross margin.
"Our sales of consumer electronics and computing and wireless products were significantly below our expectations during the quarter," said President and CEO Dennis May. "The broad distribution of these categories across a variety of retail formats combined with the intensely promotional environment led to a challenging operating environment for hhgregg."
May said that hhgregg chose not to "fully participate" in the heavy promotional environment of the most recent holiday sales season, and managed inventory levels to match product demand.
"The broadening distribution and heightened promotional nature of the consumer electronics category during the holiday period reinforces our strategic decision to continue transforming our business toward a broader assortment of home products, including appliances and home furnishings," May said. "We remain pleased with the strength of these products, with the third fiscal quarter representing our tenth consecutive quarter of comparable store sales increases in the appliance category."
He said the retailer would continue with initiatives to drive profitable sales and customer traffic in appliances and home furnishings."
to Daily News