Indianapolis, Ind. - Lower costs, richer margins and higher sales from the addition of 42 new stores fueled a 45.7 percent increase in hhgregg's fourth quarter fiscal profits to $14.6 million.
Net sales for the three months ended March 31 rose 21.5 percent to $507 million, but same-store sales declines across all major categories led to a 10.8 percent drop in comparable store sales.
Comps declined nearly 17 percent in video due primarily to a double-digit decline in average selling prices (ASPs), driven by lower than expected demand for advanced TVs and a slight decrease in unit demand.
Comps declined 5 percent in major appliance sales due mostly to increased demand in the prior-year period as a result of the government appliance stimulus programs, which were not repeated this year.
Comps for the company's catchall "other" merchandise category, which includes audio, computers, personal electronics, furniture and mattresses, fell 4.2 percent due primarily to double-digit comp declines in cameras and camcorders and mid-single-digit decreases in small electronics, partially offset by double-digit increases in of computers and video games.
"Despite industry headwinds and inclement weather around the Super Bowl selling period, we aggressively managed the business and delivered meaningful earnings growth in the fourth fiscal quarter," said president/CEO Dennis May. "Strong inventory management and solid execution allowed us to increase gross margin by nearly 100 basis points while reducing per-store inventory levels by approximately 20 percent compared to the prior year. Merchandise margins were up across all key product categories and we remain pleased with our new stores sales productivity and our return on investment of our new stores."
Full year profits rose 23 percent to $48.2 million on sales of $2.1 billion, an increase of 35.4 percent.