hhgregg reported lower margins but higher sales in its fiscal second quarter, reported “significant volatility” in the marketplace, but said it would continue its expansion next year.
The chain said there were higher expenses, lower margins and a drop-off in major appliance demand which hurt profits in the company’s second fiscal quarter.
Yet the CE and appliance chain plans to open upward of 45 new stores next year in Miami, western Pennsylvania and other markets, on top of the 51 new locations added over the past 12 months.
Net income declined 20.4 percent to $3.9 million for the three months, ended Sept. 30, while net sales surged nearly 45 percent to $480.9 million, due largely to the new-store build out.
Comp-store sales declined 1.5 percent during the period, which the chain attributed to a 3.9 percent decrease in appliance comps as the federally funded majap rebate program pulled demand into the prior quarter.
An oversupply of TVs and weak demand for new video technologies will result in lower prices and compelling vendor promotions for 3D TV, IPTV and larger-screen LEDs beginning Black Friday and continuing through Super Bowl, hhgregg president/CEO Dennis May said.
May said a decrease in 3D TV retails, to a $1,199, $1,299 and $1,499 step, “moves compelling product into a power alley price point,” while still providing solid margins and moving consumers away from a $499 purchase.