hhgregg Inc. (NYSE:HGG), an appliance and electronics retailer,
trimmed its full-year earnings view and expects a fall in third quarter
profit, citing lower-than-expected margins in the video category and
higher advertising spending.
The Indianapolis-based company now expects earnings per share in the
range of $1.05 to $1.15 from prior expectations of $1.26 to $1.41.
Analysts expect earnings of $1.34 per share.
"The video industry experienced heavier than expected promotional
activity across all screen sizes, which negatively impacted industry
average selling prices and margins," said chief executive Dennis May.
"While we believe we maintained our market share in video during the
quarter, the difficult industry trends negatively impacted our results
beyond our expectations."
The company now sees fiscal 2012 net sales increase of 22% to 24%,
from 20% to 25% growth projected earlier. It now sees comparable store
sales of flat to positive 2%, versus prior view of flat to positive 3%.
For the third quarter, hhgregg expects earnings per share of 60
cents, down from 66 cents in the year-ago quarter, while Wall Street
projects 77 cents. Net sales is expected to jump 27% to $829.5 million.
The company estimates comparable store sales to have increased 3.9%,
with the video category expected to have decreased 4.8%.
The stock ended 4.9 percent lower at $13.13 on Monday. The shares
have been trading in the 52-week range between $8.88 and $20.56.