The decision to stay above the promotional fray, plus a poorly-timed transition to a new distribution center, sent hhgregg’s holiday-quarter comp-store sales skidding some 22 percent.
In preliminary estimates of its fiscal third-quarter numbers, the 220-store appliance, CE and furniture chain said net sales fell about 24 percent, to $453 million, for the three months ended Dec. 31, 2016.
President/CEO Robert Riesbeck laid the blame on consumer electronics, which was “very competitive again this season” and represented a larger mix of hhgregg’s holiday business.
“We made the strategic decision to compete less in this category, particularly at the entry level price points,” he said.
CE comps fell about 39 percent, compared to an approximate 9 percent decline for home products. But going forward the company will resume its focus on the appliance and home furnishings categories, and will continue to reposition its CE business toward premium models, Riesbeck said.
The chain also expects to incur a non-cash charge of $7 million to $12 million for asset impairment of certain locations in the quarter.
The company will release its formal third-quarter results on Jan. 26.