Hhgregg Sees Q3 Net Sales Below View - Quick Facts

(RTTNews) - hhgregg Inc. (HGG) said that it estimates net sales for the third fiscal quarter of 2016 to be about $593 million, a decrease of about 11% as compared to net sales of $666 million reported for the third fiscal quarter of 2015. Analysts polled by Thomson Reuters expect the company to revenues of $636.77 million for the third-quarter. Analysts' estimates typically exclude special items.

Third fiscal quarter comparable store sales are estimated to have decreased about 11%, with the appliance category estimated to have decreased about 10%, the consumer electronics category estimated to have decreased approximately 8%, the home products category estimated to have increased approximately 3%, and the computer and tablet category estimated to have decreased approximately 35%.

Dennis May, President and CEO, said, " 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 expects to incur a non-cash charge for asset impairment of certain locations in the quarter ended December 31, 2015. The impairment charge is based on current trends in certain under-performing markets and the lack of visibility to the recoverability of the assets associated with those locations. The company expects the impact of this non-cash pre-tax charge to be $15 million to $25 million and is currently in the process of finalizing that determination.