Retail Stocks on the Rise After Reporting Earnings

hhgregg Inc. (NYSE:HGG) in the third quarter as profit dropped from a year earlier. Net income for hhgregg Inc. fell to $22.5 million (60 cents per share) vs. $26.9 million (66 cents per share) a year earlier. This is a decline of 16.5% from the year earlier quarter. Revenue rose 26.9% to $829.5 million from the year earlier quarter. hhgregg Inc. fell in line with the mean analyst estimate of 60 cents per share. Analysts were expecting revenue of $825.5 million.

Dennis May, President and CEO commented, “While pleased with our overall comparable store sales increase of 3.9% and market share gains during the third fiscal quarter, we were disappointed with the macro trends across the video category. However, management continues to be pleased with the traction the Company is gaining around its fiscal 2012 initiatives. In particular, our initiatives to gain market share in the appliances category and to grow our home office category sales have produced favorable results. Management believes the Company gained significant market share in both of these categories during the quarter. We are excited about the near term success these initiatives have generated, and believe these investments will continue to produce increased revenue and gross margin dollars per store.”

Competitors to Watch: Best Buy Co., Inc. (NYSE:BBY), CONN’S, Inc. (NASDAQ:CONN), Wal-Mart (NYSE:WMT), Target (NYSE:TGT), Systemax (NYSE:SYX), RadioShack Corporation (NYSE:RSH), GameStop Corp. (NYSE:GME) and Funtalk China Hldgs. Ltd. (NASDAQ:FTLK).

O’Reilly Automotive Inc. (NASDAQ:ORLY) reported net income above Wall Street’s expectations for the fourth quarter. Net income for the auto parts store rose to $123 million (94 cents per share) vs. $105.8 million (74 cents per share) in the same quarter a year earlier. This marks a rise of 16.3% from the year earlier quarter. Revenue rose 6.2% to $1.39 billion from the year earlier quarter. O’Reilly Automotive Inc. reported adjusted net income of 93 cents per share. By that measure, the company beat the mean estimate of 85 cents per share. Analysts were expecting revenue of $1.41 billion.

“We are pleased to report another quarter of solid financial results,” stated Greg Henslee, CEO and Co-President of the Company. “As a result of our continued efforts to profitably grow sales, along with our culture of strict expense control, we generated a fourth quarter increase in comparable store sales of 3.3% while also increasing our adjusted operating margin to 14.7%, a 214 basis-point improvement over the fourth quarter last year. For the year, we generated a comparable store sales increase of 4.6%, and we expect to continue these strong results in 2012 with comparable store sales guidance of 3% to 6%. For the full year, we generated a record 14.9% adjusted operating margin, and we expect to achieve an operating margin of 15% in 2012, a year earlier than our 2013 goal. Our continued success is the direct result of our Team Members’ commitment to providing the highest level of service to our customers every day. I want to thank Team O’Reilly for your dedication and hard work and congratulate you on another great year.”

Competitors to Watch: Advance Auto Parts, Inc. (NYSE:AAP), AutoZone, Inc. (NYSE:AZO), The Pep Boys – Manny, Moe & Jack (NYSE:PBY), Ford (NYSE:F), Toyota (NYSE:TM), General Motors (NYSE:GM) and U.S. Auto Parts Network, Inc. (NASDAQ:PRTS).

To contact the reporter on this story: Derek Hoffman at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com