Dismal holiday-period sales led to deepening losses at hhgregg.
The Indianapolis-based chain reported a net loss of $58.3 million for its fiscal third quarter, ended Dec. 31, 2016, compared with a prior-year net loss of $26.9 million.
Net sales fell 23.7 percent to $452.8 million and comp sales plummeted 22.2 percent due to competitive market pressures, particularly in CE, and the consolidation of two distribution centers into a single new facility, president/CEO Robert Riesbeck said.
Earnings were also hurt by a sharp decrease in gross margin, from 26.1 percent in 2015 to 22 percent last quarter.
Broken out by product category, CE comps fell 38.6 percent; furniture and mattress comps decreased 9 percent; and majap comps slipped 4.2 percent.
All experienced declines in average selling price (ASP) and unit volume.
To remedy the situation Riesbeck said he will continue to shift the product mix toward appliances and furniture, which he’s supporting with additional Fine Lines premium majap departments and a new store layout that puts furniture front and center.
The mix shift is already pronounced, with majaps growing from 43 percent of net sales to 53 percent quarter over quarter, while CE was almost the reverse, falling from 52 percent of net sales in Q3 2015 to 41 percent last quarter.
hhgregg will also continue cutting costs and transitioning its CE business toward a more premium assortment, Riesbeck said.