Multiregional majap, CE and home-furnishings chain hhgregg reported a $26.9 million net loss in its fiscal third quarter as a hard-fought holiday season took a toll on sales and margins.
Net sales fell 10.9 percent, to $593.2 million for the three months ending Dec. 31, 2015, and comp sales declined 10.8 percent, including in-store and online.
Losses more than doubled from last quarter’s $10.1 million in red ink, but narrowed from the $86.9 million net loss for the year-ago period.
“We did not meet our overall expectations for the quarter due to the competitive pressures in the market,” president/CEO Dennis May said, citing increased competition and a more intense promotional environment during the holiday cycle.
Broken out by category:
*Computers and tablets had the largest comp decline, down 35.2 percent amid decreases in unit volume and average selling prices (ASPs).
*Comp sales for major appliances, a category in comeback mode for most majap retailers, fell 10.4 percent on unit and ASP declines.
*CE comps were down 7.9 percent amid lower unit sales but higher ASPs, ostensibly for 4K TVs.
*Furniture and mattresses, the only category to show a comp increase, was up 3.3 percent despite lower unit sales, thanks to higher ASPs.
To help stem the tide, May said the company has shaved nearly $49 million in costs this fiscal year through reduced wages, benefits, payroll taxes, advertising and delivery expenses, and will focus on top-line growth through furniture, premium TVs and an expansion of its Fine Lines luxury appliance boutiques.
At the same time, the company has also put its plans for nationwide expansion on hold, May told the Indianapolis Business Journal last fall. The chain currently operates 227 stores in 20 states following a 16-year buildout from its Indiana base.
Here's a breakout of hhgregg's net sales mix and comp store results by category for the three- and nine-month periods ended Dec.31, 2015 and 2014: