hhgregg Meets on the Top Line, Misses Where It Counts

Seth Jayson, The Motley Fool
Updated

hhgregg (NYS: HGG) reported earnings yesterday. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q3), hhgregg met expectations on revenues and missed expectations on earnings per share.

Compared to the prior-year quarter, revenue increased significantly and GAAP earnings per share contracted.

Margins dropped across the board.

Revenue details
hhgregg logged revenue of $829.5 million. The 13 analysts polled by S&P Capital IQ expected to see revenue of $826.4 million. GAAP sales were 27% higher than the prior-year quarter's $653.7 million.

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.60. The one earnings estimate compiled by S&P Capital IQ anticipated $0.72 per share. GAAP EPS of $0.60 for Q3 were 9.1% lower than the prior-year quarter's $0.66 per share.

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Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 27.2%, 240 basis points worse than the prior-year quarter. Operating margin was 4.5%, 250 basis points worse than the prior-year quarter. Net margin was 2.7%, 140 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $636.8 million. On the bottom line, the average EPS estimate is $0.37.

Next year's average estimate for revenue is $2.51 billion. The average EPS estimate is $1.12.

Investor sentiment

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on hhgregg is hold, with an average price target of $15.42.

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At the time thisarticle was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Motley Fool newsletter services have recommended buying shares of hhgregg. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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