HHGregg Inc. (HGG) warned Monday morning that results for its 2013 fiscal third quarter will be below expectations and slashed its full-fiscal-year guidance. The Indianapolis, Indiana-based retailer said that same-store sales are estimated to have dropped by 9.7 percent, paced by a 24.6 percent slide in the video category and 23.7 percent other categories that will not be able to be offset by increases in appliance and computer and mobile phones. The appliance business, which is the company’s largest category, is estimated to have beat last year’s quarter by 6.1 percent.
The retailer estimates that fiscal third-quarter net sales will be approximately $799.6 million, a 3.6 percent decline from Q3 fiscal 2012. Net income is expected of roughly $17.4 million, or 51 cents per diluted share, in the most recent quarter, compared to $22.5 million, or 60 cents per diluted share, for the same period the year prior.
The preliminary figures are shy of Wall Street expectations of $845 million in revenue and 59 cents per share in profits.
“Fundamental shifts across the video category continued to pressure our business during our third fiscal quarter, and we were disappointed in our video performance. Declining industry demand for flat screen televisions along with broadened distribution of large-screen televisions negatively impacted overall store traffic and video category sales,” said HHGregg President and CEO Dennis May in today’s statement.
“[We] are pleased with the consumer acceptance of our new products, particularly the roll-out of the furniture category and the introduction of Apple™ products,” added May.
With sagging figures in other areas and continued softness in the video category projected in the fourth quarter, the company said that it now expects annual net income between 70 cents and 80 cents per diluted share. The prior forecast was for earnings between 90 cents and $1.05 per share. Analysts were calling-for earnings of 93 cents per share.
Net sales are projected to increase between 0.0% and 1.0% for the complete year, significantly down from prior estimates of 3.0% to 6.0% growth.
Guidance for full fiscal 2013 comparable store sales were also lowered from previous guidance of a negative 6.0% to negative 4.0% range to negative 8.5% to negative 7.5%.
The official earnings release is slated for January 31 by the company.
Shares have lost 10 percent in early trading with the less-than-expected estimates and full year revisions. A little over an hour after the opening bell, shares are printing $7.10. Since the start of 2012, shares of HGG lost more than half of their value.