For its third fiscal quarter ended December 31, hhgregg said its preliminary sales figures indicated a revenue decrease of 11% to $593 million versus the period a year prior. Comparable store sales also slid by 11%.
In its estimates, the retailer stated that the home products category sales actually increased about 3%. However, appliance category sales fell by about 10%, hhgregg estimated, while the consumer electronics category sales decreased about 8%, and the computer and tablet category sales decreased about 3%.
Dennis May, the company’s president and CEO, stated, “During the quarter, we were challenged by the competitive pressures in the market. Although we are disappointed with our overall performance during the quarter, we are pleased with many of the strategic investments we have made for our transformation. Our investment in the furniture category drove an increase of approximately 16% in furniture comparable store sales during the quarter. Our focus on large-screen, premium video drove 59% of our TV sales in the quarter to be 4K TVs, up from 50% in the second fiscal quarter. We are also pleased with the continued cost savings initiatives and remain on track to achieve more than $50 million of cost savings in fiscal 2016. We remain confident, in line with our prior expectations, that we will generate positive adjusted EBITDA for the fiscal year.”
The company said that it anticipates incurring a non-cash charge for asset impairment of certain locations in the quarter ended December 31, 2015, of between $15 million to $25 million.
Robert Riesbeck, hhgregg CFO, said, “While the accounting related charge is significant, it is important to note that this charge is non-cash. We finished the quarter in a strong liquidity position with a cash balance of approximately $7 million and no outstanding borrowings and continue to efficiently manage our working capital. Our inventory balance as of December 31, 2015 was more than $40 million lower than the inventory balance at December 31, 2014.”
The retailer currently operates 227 stores in 20 states.