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hhgregg Reports Higher Fiscal Q3 Sales, Profits

2/08/2011 09:36:12 AM Eastern
Indianapolis - hhgregg reported a 30.6 percent net increase in sales and an 18.4 percent increase in net income for its fiscal fourth quarter, ended Dec. 31.

Sales were $653.7 million, up from the prior year's $500.4 million, while comp-store sales decreased 6.2 percent during the quarter.

The chain operated 172 stores by the end of the period, up from 127 in the prior year's quarter.

Net income was $26.9 million, up from the prior year's $22.7 million.

In a prepared statement, Dennis May, president/CEO, commented, "Despite softer than originally expected industry holiday sales, we are pleased with the manner in which the company navigated through the environment while growing bottom-line earnings. We continue to be pleased with our new store sales productivity and our team's execution in both new and existing markets. As a result, we remain confident in our ability to continue to gain market share as we enter new markets and move closer to becoming a national retail chain."

Sales mix percentages for the quarter remained the same as last year -- video at 50 percent, appliances at 30 percent and other at 20 percent.

In comp-store sales by category in the quarter, video was down 5.9 percent, appliances decreased 5.7 percent and other was down 7.9 percent.

Comp-store sales in the appliance category decreased as a result of moderate decreases in unit demand and average selling price, the company said. The strong demand in the first fiscal quarter of 2011 associated with the appliance stimulus programs pulled demand in the appliance category into the first fiscal quarter, thus negatively impacting results and comp-store sales in the second and third fiscal quarters, the company said. This resulted in an overall comp-store sales increase in the appliance category of 1.6 percent for the nine-month period, ended Dec. 31.

For the three- and nine-month periods, decreases in comp-store sales for the video category were due primarily to a double-digit decrease in average selling prices driven by lower-than-expected demand for emerging technologies, partially offset by continued strong overall video unit demand.

For the nine months ending Dec. 31, net sales were $1.57 billion, up 40.6 percent from $1.12 billion in the prior year. Comp-store sales were down 1.4 percent. Net income was $33.6 million for the nine months, up from $29.2 million.
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