Hhgregg Inc. Earnings: Explosive Profit and Revenue Growth
hhgregg Inc. (NYSE:HGG) reported net income above Wall Street’s expectations for the fourth quarter. HHgregg is a specialty retailer of consumer electronics, home appliances and related services.
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hhgregg Earnings Cheat Sheet for the Fourth Quarter
Results: Net income for hhgregg Inc. rose to $53.6 million ($1.45 per share) vs. $14.6 million (36 cents per share) in the same quarter a year earlier. This is a more than threefold rise from the year-earlier quarter.
Revenue: Rose 21.1% to $613.8 million from the year-earlier quarter.
Actual vs. Wall St. Expectations: hhgregg Inc. reported adjusted net income of 39 cents per share. By that measure, the company beat the mean estimate of 37 cents per share. It fell short of the average revenue estimate of $644.6 million.
Quoting Management: Dennis May, President and Chief Executive Officer of the Company, commented, “Our fourth quarter results were driven by solid market share gains in the appliance and home office categories, offset by continued headwinds in the video category. Through the launch of a number of strategic initiatives earlier this year, we continue to strengthen our positioning in appliances, expand our assortments in home office products and build our mobile business. We remain pleased with our progress in these key areas and believe recent investments in our multi-channel platforms and our unparalleled customer service better position us in a changing retail environment.”
Gross margin shrank 0.9 percentage point to 30.5%. The contraction appeared to be driven by increased costs, which rose 22.7% from the year earlier quarter while revenue rose 21.1%.
Revenue has now increased for three consecutive quarters. In the third quarter, revenue rose 26.9% to $829.5 million while the figure rose 28.6% in the second quarter from the year earlier.
The company beat estimates last quarter after being in line with expectations in the third quarter with net income of 60 cents per share.
Looking Forward: The average estimate for the first quarter of the next fiscal year remains unchanged at 3 cents a share. Over the past sixty days, the average estimate for the fiscal year has reached $1.09 abs per share, a decline from $1.10.
Competitors to Watch: Best Buy Co., Inc., CONN’S, Inc., RadioShack Corporation, GameStop Corp., Shiming U.S, Inc., Scailex Corp., Ltd., Circuit City Stores Inc, Funtalk China Hldgs. Ltd., and South Electronics Co. Plc.
(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)
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