Hhgregg Earnings: Falling Revenue Breaks Streak of Four Consecutive Increases, But Beats Street

hhgregg Inc. (NYSE:HGG) reported its results for the second quarter. HHgregg is a specialty retailer of consumer electronics, home appliances and related services.

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hhgregg Inc. Earnings Cheat Sheet

Results: Net income for hhgregg Inc. fell to $3.8 million (11 cents per share) vs. $6 million (16 cents per share) a year earlier. This is a decline of 36.9% from the year-earlier quarter.

Revenue: Fell 5% to $587.6 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: hhgregg Inc. beat the mean analyst estimate of 9 cents per share. It fell short of the average revenue estimate of $644.6 million.

Quoting Management: Dennis May, President and CEO commented, “While the video category remained challenging across the industry in our second fiscal quarter, we were pleased with the early progress of strategic initiatives designed to enhance store productivity. While we improved our video sales mix to focus on larger screen televisions which improved our gross margin rate, we were disappointed by the amount of overall market share of televisions we lost. Over the next few quarters we will continue to refine our strategy to find the right mix between gross margin rate and market share. We continue to see positive results in our appliance business and are continuing to test new merchandise and tailor our assortment around products that leverage our consultative sales force, delivery and installation network and private-label credit offering. In our fiscal third quarter, we expect to fully rollout furniture and exercise equipment to all of our stores, along with continuing to rollout to a selective number of stores an expanded offering of tablet and hand held consumer products.”

Key Stats:

A year-over-year revenue decrease last quarter snaps a streak of four consecutive quarters of revenue increases. The best quarter in that span was the second quarter of the last fiscal year, which saw revenue rise 28.6%.

The company has now topped analyst estimates for the last three quarters. It beat the mark by one cent in the first quarter and by 2 cents in the fourth quarter of the last fiscal year.

Margins increased in the first quarter after dropping the quarter before. Gross margin grew 1.1 percentage points from the year-earlier quarter to 29.6%. In the fourth quarter of the last fiscal year, the figure rose 0.3 percentage point to 29.9% from the year earlier quarter.

The company reported a profit last quarter after being in the red the prior quarter. In the fourth quarter of the last fiscal year, the company booked a net loss of $53.6 million, or a loss of $1.42 per share.

Looking Forward: Analysts appear increasingly optimistic about the company’s results for the next quarter. The average estimate for the third quarter has moved up from 58 cents a share to 59 cents over the last ninety days. The average estimate for the fiscal year is 92 cents per share, falling from 93 cents thirty days ago.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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