Indianapolis — Despite the strong performance of its new stores in the fiscal first quarter, hhgregg reported profit slipped 26.7 percent to $2.1 million, from $2.87 million in the same period last year.
The company blamed weakness in gross profit margins and higher expenses for advertising and selling, general and administrative purposes for the decline.
Net sales for the three months, ended June 30, increased 16.2 percent over net sales for the comparable prior year period to $295.4 million. The increase was primarily attributed to the addition of 18 stores during the past 12 months and strong notebook PC and large flat-panel LCD TV sales. But that was offset by a 2.6 percent decrease in comp-store sales, which the retailers said was a result of weak demand for appliances, mattresses and personal electronics.
The company’s 100th store opening is planned for later this month in Mishawaka, Ind., and the chain plans to add six locations in its core Florida demographic market areas over the next two fiscal quarters ending Dec. 31.
Dennis May, president/CEO, commented, “We were pleased with our quarterly performance, with strong results in our video category and prudent and effective SG&A cost management, balancing the anticipated downturn in our core appliance business. We successfully opened our Florida distribution center and staffed our Florida management team and have been pleased with our initial new store results. We look forward to adding more stores in Florida this year, not only gaining a foothold in a market that has strong long-term potential but also leveraging our distribution and marketing investments in the short term.”