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hhgregg Raises Q4 Sales, Profit Guidance

4/08/2009 10:12:00 AM Eastern

Indianapolis — hhgregg raised its preliminary net sales and earnings results for the fourth quarter and fiscal year, both ended March 31, due in part to the closing of Circuit City.

The chain, which will issue its final results for the quarter and year on June 2, said late Tuesday that its unaudited preliminary results shows sales of $365 million for the fourth quarter, a 13 percent increase over the prior year.

Comp-store sales decreased by approximately 6.5 percent in the quarter, compared with previous comp-store sales guidance of a 7 percent to 11 percent decline

Net income per diluted share for the fourth fiscal quarter is expected to range between 39 cents and 42 cents, as compared with prior-year adjusted net income per diluted share of 32 cents.

For the fiscal year hhgregg expects to report net sales of around $1.4 billion and expects net income per diluted share to range between $1.08 and $1.11 as compared with prior guidance of net income per diluted share of 85 cents to 95 cents and prior-year adjusted net income per diluted share of $1.07.

Dennis May, president/COO, said in a prepared statement, “Our very strong preliminary fourth-quarter results were driven by better than expected performance in sales, gross margin and expense leverage.”

While not mentioning Circuit City by name, he said that its departure “led to a pick-up in traffic and strong buying opportunities. In addition, our cost savings, inventory management and working capital initiatives drove higher operating efficiencies throughout the quarter.”

May warned that in its fiscal first half, the retailer, "will ... face our most difficult same store sales comparison of the year during the first half of the fiscal year, which will be impacted by a larger seasonal concentration of appliances in our sales mix, a shift in timing of the Easter holiday, and the lapping of the 2008 stimulus checks."

hhgregg currently operates 110 stores in Alabama, Florida, Georgia, Indiana, Kentucky, North Carolina, Ohio, South Carolina and Tennessee.