* Adjusted EPS 39 cents vs Street view 29 cents
* Sales rise 21.5 pct, boosted by new stores
* Shares up 18.75 pct
(Adds analyst reaction, sales, share move, byline)
By Dhanya Skariachan
NEW YORK, May 26 U.S. appliance and electronics
chain Hhgregg Inc HGG.N posted quarterly profit that blew
past Wall Street expectations on strong sales at its new
stores, sending its shares up nearly 19 percent.
The results may have come as a surprise to investors
accustomed to seeing the retailer underperform in recent
"Given the fact Hhgregg had missed consensus estimates in
three of the previous four quarters, we think bullish investors
are likely breathing a sigh of relief based on the strong ...
earnings outperformance," Anthony Chukumba, an analyst with
BB&T Capital Markets, said in a note.
Sales rose 21.5 percent to $507.0 million but missed
analysts' average estimate of $518.2 million. New stores
boosted sales, even as sales at stores open at least 14 months
fell 10.8 percent on weak demand for appliances.
Indianapolis-based Hhgregg has stepped up expansion in
recent years in a bid to become a national chain and compete
more effectively with larger rival Best Buy Co Inc (BBY.N).
Hhgregg has added a net 42 stores in the past 12 months.
Chukumba expressed concern about Hhgregg's future sales
"Weak trends are likely to continue in the near term in
Hhgregg's core video and appliance categories," he said.
He also warned that Best Buy's plans to aggressively go
after the appliance business, and Hhgregg's limited exposure to
the fast-growing tablet, smartphone and e-reader categories,
could also work against the smaller chain.
Hhgregg said net income rose to $14.6 million, or 36 cents
a share, in the fiscal fourth quarter ended March 31, from $10
million, or 25 cents a share, a year earlier.
Excluding one-time items, it earned 39 cents a share, well
ahead of analysts' average estimate of 29 cents, according to
Thomson Reuters I/B/E/S.
Hhgregg shares were up $2.43, or 18.75 percent, to $15.39
in midday trading on the New York Stock Exchange.
(Reporting by Dhanya Skariachan, editing by Gerald E.
McCormick and John Wallace)