INDIANAPOLIS (AP) ? Appliance and electronics retailer Hhgregg Inc. said Tuesday that it expects its fiscal third-quarter net income to decline, hurt by lower than expected profit margins in the video product category and higher ad spending.
Its shares fell almost 7 percent in premarket trading.
The company expects earnings of $22.5 million, or 60 cents per share for the three months that ended on Dec. 31. That’s down from $26.9 million, or 66 cents per share, in the same period a year earlier.
Hhgregg expects revenue of $829.5 million, up 27 percent from $653.7 million.
Analysts, on average, were expecting earnings of 77 cents per share on revenue of $811.8 million, according to a poll by FactSet.
Hhgregg estimates that its sales at stores open at least a year grew 3.9 percent in the third quarter. This is a key measure of a retailer’s health because it excludes stores that opened or closed during the year.
For the full year, the company now expects earnings of $1.05 to $1.15 per share, down from its earlier outlook of $1.26 to $1.41 per share.
It expects revenue to grow by 22 to 24 percent, compared with its previous guidance of a 20 percent to 25 percent increase.
Analysts are expecting earnings of $1.34 per share on revenue of $2.5 billion for the year ending in March.
Hhgregg plans to report its full quarterly results on Feb. 8.
The Indianapolis-based company’s stock fell 88 cents, or 6.7 percent, to $12.25 in premarket trading Tuesday.
