On Thursday, retailer hhgreg (HGG) reported lower quarterly earnings and cut its profit outlook for the year, sending HGG stock tumbling more than 14% in morning trading.
HGG stock fell after the company posted an adjusted profit of $5.2 million for its fiscal third quarter, down from adjusted earnings of $17.7 million in the year-ago quarter. The company attributed the profit decline to an 11.2% plunge in same-store sales during the quarter. Fiscal third-quarter sales dropped to $707.1 million, down 11.6% from the year-ago period.
The company also lowered its outlook for fiscal 2014 from prior earnings estimates of between 75 cents and 90 cents per share, down to between 30 cents and 40 cents per share. It said it expects store sales to decline between 5.5% and 7% for the year.
CEO Dennis May noted that hhgreg had opted “not to fully participate in the heavy promotional environment” of consumer electronics and computer products during the holiday shopping season. Instead, hhgreg chose to manage “inventory levels to match the product demand of our business.” The company continues to move toward selling a wider range of appliances, home furnishings and other home-related products.
HGG stock closed at $10.56 a share on Wednesday. HGG stock had climbed more than 37% over the past 12 months, prior to Thursday.