Consumer electronics retailer hhgregg, Inc. (HGG) reported Friday a decline in its first-quarter profit, reflecting a 15% decrease in comparable store sales, as a result of weakness in demand for appliance and video products. Earnings, however, came in above analysts' consensus by a penny. The company also reaffirmed its earlier outlook for the full year.
For the first quarter, net income dropped to $1.47 million or $0.04 per share from $2.10 million or $0.06 per share in the previous year. On average, 13 analysts polled by Thomson Reuters expected the company to report earnings of $0.03 per share for the first quarter. Analysts' estimates typically exclude special items.
Net sales for the period decreased 3.7% to $284.39 million from $295.41 million in the first quarter of the prior fiscal year. Ten analysts were expecting revenues of $286.43 million for the first quarter.
Comparable store sales dipped 14.7%, compared to a decrease of 2.6% in the past year, attributable to weakness in demand for both the appliance and video product categories.
hhgregg noted that average selling prices of video products fell significantly during the quarter, as prices dwindled in LCD and plasma categories. The company also observed a reduction in appliance sales relative to its traditional net sales mix.
Looking ahead to the full year, the company said it still expects earnings to be in the range of $0.85 - $1.00 per share and net sales to grow by 3% - 7% which would translate to a comparable store sales decline of 7% to 12%.
Analysts currently estimate earnings of $0.96 per share on revenues of $1.47 billion for the fiscal year 2010.
Further, the company revealed that it intends to open 20 - 22 new stores in fiscal 2010, and 40 - 45 new stores in 2011. The number of stores open as of June 30, 2009 was 111, up from 97 a year ago.
hhgregg projected capital expenditures, net of sale and leaseback proceeds, to range from $45 million to $50 million for the full year.
HGG is currently trading at $20.29, up $0.70 or 3.57%, on the NYSE.
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