Hhgregg expects 3Q revenue to miss Street's view

INDIANAPOLIS (AP) -- Hhgregg anticipates that its fiscal third-quarter revenue dropped about 12 percent from a year ago and will fall short of Wall Street's expectations. The company also cautioned that its quarterly earnings per share will be below its prior-year results due to the revenue miss.

Shares of the appliance and electronics store chain declined in morning trading on Monday.

Hhgregg Inc. said it expects quarterly revenue of about $707.1 million, down from $799.6 million in the prior-year period.

Analysts polled by FactSet forecast revenue of $758.7 million.

President and CEO Dennis May said in a statement that holiday sales were hurt by increased promotions on televisions and tablets at various retailers. May said that hhgregg decided not to use heavy promotions during the quarter.

The company is also continuing to shift its business toward a broader mix of home products, including appliances and home furnishings, due to the rising promotions for consumer electronics, he added.

Hhgregg said it anticipates third-quarter sales at stores open at least a year dropped about 11.2 percent. The company experienced declines in its home products, consumer electronic and computing and wireless categories. Appliance sales rose approximately 1.5 percent.

Sales at stores open at least a year is a key gauge of a retailer's health because it excludes results from stores recently opened or closed.

Hhgregg said that it expects to be materially below its prior full-year forecast given the anticipated third-quarter revenue miss. It plans to update its full-year earnings outlook when it reports its quarterly financial results on Jan. 30.

The company's stock dropped 64 cents, or 4.7 percent, to $12.96 in morning trading.