Reuters logo
UPDATE 2-Hhgregg profit tops Street view; shares soar
May 26, 2011 / 2:09 PM / 6 years ago

UPDATE 2-Hhgregg profit tops Street view; shares soar

* 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 (Reuters) - 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 quarters.

“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 prospects.

“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)

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below