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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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