hhgregg, Inc. (HGG) saw its loss widen to $18.38 million, or $0.66 a share for the quarter ended Sep. 30, 2016. In the previous year period, the company reported a loss of $10.13 million, or $0.37 a share. On the other hand, adjusted net loss for the quarter widened to $14.13 million, or $0.51 a share from a loss of $9.72 million or $0.35 a share, a year ago. Revenue during the quarter dropped 6.65 percent to $454.50 million from $486.88 million in the previous year period. Gross margin for the quarter expanded 21 basis points over the previous year period to 28.69 percent. Operating margin for the quarter stood at negative 3.84 percent as compared to a negative 1.95 percent for the previous year period.
Operating loss for the quarter was $17.46 million, compared with an operating loss of $9.48 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at negative $6.15 million compared to negative $0.68 million in the prior year second quarter. At the same time, adjusted EBITDA margin stood at negative 1.35 percent for the quarter compared to negative 0.14 percent in the last year period.
"In the second fiscal quarter we continued to implement our strategic plan and to position hhgregg as the best option to purchase appliances, furniture and premium consumer electronics. We successfully drove continued growth in appliances and furniture during the quarter, with stable gross margins, offset by continued decreases in the consumer electronics category. We also maintained a debt free balance sheet at quarter end." said Bob Riesbeck, chief executive officer. Riesbeck continued, "We also experienced solid growth through our online channel. Our focus on the customer experience continues to reflect positively as we again saw increases in customer satisfaction scores. We are energized by the upcoming holiday season as we look to maintain our steady progress."
Operating cash flow improves significantly
hhgregg, Inc. has generated cash of $20.93 million from operating activities during the first half, up 117.55 percent or $11.31 million, when compared with the last year period. The company has spent $11.55 million cash to meet investing activities during the first six months as against cash outgo of $8.13 million in the last year period. It has incurred net capital expenditure of $11.43 million on net basis during the first six months, up 41.92 percent or $3.38 million from year ago period.
The company has spent $11.88 million cash to carry out financing activities during the first six months as against cash inflow of $2.99 million in the last year period.
Cash and cash equivalents stood at $1.21 million as on Sep. 30, 2016, down 96.54 percent or $33.67 million from $34.88 million on Sep. 30, 2015.
Working capital declines
hhgregg, Inc. has witnessed a decline in the working capital over the last year. It stood at $77.47 million as at Sep. 30, 2016, down 23.02 percent or $23.17 million from $100.63 million on Sep. 30, 2015. Current ratio was at 1.38 as on Sep. 30, 2016, down from 1.39 on Sep. 30, 2015.
Cash conversion cycle (CCC) has decreased to 2 days for the quarter from 46 days for the last year period. Days sales outstanding went up to 7 days for the quarter compared with 6 days for the same period last year.
Days inventory outstanding has decreased to 34 days for the quarter compared with 81 days for the previous year period. At the same time, days payable outstanding went down to 39 days for the quarter from 41 for the same period last year.
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