HHGregg Reported Mixed Q4 Results, Top Line Up 21.5%

May 26, 2011

HHGregg (NYSE:HGG) reported Q4 EPS of $0.39, ex-items, ahead of consensus estimates of $0.29 per share. Revenues for the quarter rose 21.5% year-over-year to $507.0 million, missing consensus estimates of $518.2 million.The company sees 2012 EPS of $1.20 to $1.35, vs. consensus estimates of $1.29 per share.Its board of directors authorized a $50 million share repurchase program.Dennis May, President and Chief Executive Officer of the Company, commented, "Despite industry headwinds and inclement weather around the Super Bowl selling period, we aggressively managed the business and delivered meaningful earnings growth in the fourth fiscal quarter. Strong inventory management and solid execution allowed us to increase gross margin by nearly 100 basis points while reducing per-store inventory levels by approximately 20% compared to the prior year. Merchandise margins were up across all key product categories and we remain pleased with our new stores sales productivity and our return on investment of our new stores. During the quarter, we also continued to strengthen our financial position by increasing our revolving credit facility's borrowing capacity and extending its maturity until 2016 while also utilizing excess cash on hand to repay our term debt at the end of the year."hhgregg has a potential upside of 45.5% based on a current price of $12.96 and an average consensus analyst price target of $18.86.