Gregg Appliances Sales Climb 10.6%
By Jeff Malester -- TWICE, 2/27/2006
Indianapolis— The addition of eight new stores during the past 12 months, as well as rise in comp-store sales, elevated fiscal third-quarter revenue at Gregg Appliances 10.6 percent, hitting $281.2 million, up from a year-ago $254.2 million.
Comp-store sales edged upward 1.7 percent in the three months.
Gregg reported its comp-store performance was driven by sales growth in the major appliances and video categories, with video gains in flat-panel TVs outpacing declines in projection and tube sets.
The retailer expects comps to decline between 3 percent and 5 percent in the current quarter, ending March 31, compared with the same three months in 2005, due to declining demand for big-screen projection TVs in favor of plasma and LCD flat-panel technology.
Net income in Gregg's third quarter, ended Dec. 31, jumped to $22.6 million, up from $14.6 million in the same quarter in 2004. Net income in the three months included a pretax gain of about $27.9 million on the transfer of a majority of the retailer's extended service plan obligations to a third party. The gain was partially offset by a $4.6 million increase in pretax interest expense vs. the third quarter of 2004.
Sales for the nine months climbed 13.6 percent, hitting $679.1 million, up from $597.6 million in the same time frame the prior year. The increase was due largely to the eight-store addition, coupled with a 3.2 percent comp-store sales rise. The comp movement was accounted for mainly by a strong performance in the majap and video categories.
In a conference call, CEO Jerry Throgmartin reported that major appliances continue to perform well at Gregg, with third-quarter comp sales increasing by the mid-single digits for the category. Top-selling white goods included front-load washers and three-door refrigerators, he said.
The chain opened five hhgregg stores during the third quarter, including one store each in Ohio and North Carolina, and three locations in South Carolina. Since then, Gregg has also opened two Fine Lines premium appliance boutiques, in North Carolina and Ohio. No new stores are currently planned for fiscal 2007.
