Tallahassee, FL 1/10/12 (StreetBeat) – Hhgregg (NYSE: HGG) forecast weak third-quarter earnings and slashed its 2012 outlook hurt by lower-than-expected margins in its video category and higher advertising spend . The lowered 2012 outlook comes roughly two months after the U.S. appliance and electronics chain hiked its forecast for the year.Hhgregg now expects 2012 earnings to come in at $1.05-$1.15 a share, down from its previous outlook of $1.26-$1.41 a share. Analysts, on average, expected earnings of $1.12 a share, according to Thomson Reuters I/B/E/S. "Industry-wide pressure on sales and margin within the video category will continue into the fourth fiscal quarter and will negatively affect our fiscal 2012 earnings," Chief Financial Officer Jeremy Aguilar said in a statement.
On a preliminary basis, Hhgregg expects third-quarter earnings of about $22.5 million, or 60 cents per share, compared with $26.9 million, or 66 cents a share, last year. It expects sales to rise about 27 percent to $829.5 million. Analysts were expecting a profit of 77 cents a share, on revenue of $812.5 million for the third quarter.
"The video industry experienced heavier than expected promotional activity across all screen sizes, which negatively impacted industry average selling prices and margins," Chief Executive Dennis May said.
Shares of Indianapolis-based Hhgregg closed at $13.13 on Monday on the New York Stock Exchange.
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