hhgregg Narrows Q4 Loss - Twice

hhgregg Narrows Q4 Loss

But bottom drops out for CE and computer sales
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Struggling multiregional CE, appliance and furniture chain hhgregg managed to staunch some red ink during its fiscal fourth quarter.

Struggling multiregional CE, appliance and furniture chain hhgregg managed to staunch some of its red ink during the fourth quarter.

The net loss for the fiscal period, ended March 31, was limited to $9 million, compared with a year-ago net loss of $25.2 million.

But if profitability improved, revenue didn’t. Net sales fell 9.6 percent year over year, to $439 million, and comp sales followed suit, declining 9.3 percent with the closure of three showrooms over the past 12 months.

The company currently operates 226 locations in 20 states, a legacy of an aggressive buildout that had once aimed for 500 stores nationwide. But new store construction has been put on hold until the house that Jerry Throgmartin built can be put in order.

That would include finding a permanent successor to Dennis May, Throgmartin’s longtime lieutenant, who resigned as president/CEO in February following steepening quarterly losses.

Chief financial officer Robert Riesbeck, who joined the company in 2014 and succeeded May on an interim basis, tried to put a positive spin on the results, pointing to “significantly improved” earnings, deeper-than-targeted cost reductions, and a nearly 5 percent comp increase in appliances over February and March.

Comps for furniture and mattresses were also up, ahead nearly 3 percent for the quarter on top of a year-ago decline of 12.5 percent.

But the numbers elsewhere were dismal. Q4 comps for CE fell nearly 20 percent, reflecting lower prices and unit volume, while the computer and tablet category cratered with a 32.2 percent comp decline.

For the full year, net loss was more than halved, to $54.9 million from $132.7 million, while net sales declined 8 percent to just under $2 billion.

Going forward, Riesbeck said the company will be “passionate and focused on revenue growth,” and will leverage past and future investments to significantly improve net sales and profitability.

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