Jefferies Lowers Price Target on hhgregg (HGG), Weak Q1 Comp Store Sales
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Price: $0.23 --0%
Rating Summary:
1 Buy, 8 Hold, 3 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
Rating Summary:
1 Buy, 8 Hold, 3 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
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Jefferies is maintaining its Hold rating on shares of hhgregg (NYSE: HGG) while lowering its price target from $16 to $12.
The company released its Q1 results with a EPS loss of $0.02, well below the firms estimate of a gain of $0.03 and the Street's of a gain of $0.01. The miss was largely due to comp store sales falling by 13.2 percent, much higher than the 9 percent decline that the firm was anticipating.
Management highlighted that its new store productivity is above 100 percent, but the firm is forecasting that the new stores may be comping negatively in two years.
HGG reiterated its 2012 guidance of 15-20 percent sales growth and EPS of $1.20-$1.35 with a negative 3 percent to flat comp and unit growth of 35 to 40 stores.
The firm is lowering its Q2 and FY12 EPS estimates from $0.09 and $1.32 to $0.05 and $1.17. Jefferies also cut its 2013 estimate from $1.50 to $1.40.
An analyst at Jefferies comments, "Below-plan sales and earnings continue to undermine the growth story as investors discount shares heavily on doubts around this sector. While we are encouraged by the performance of tablets and the fact that new store productivity is greater than 100%, it’s unlikely we’ll see a growth multiple here until comps show meaningful improvement."
For more ratings news on hhgregg click here and for the rating history of hhgregg click here.
Shares of hhgregg closed at $11.14 yesterday.
The company released its Q1 results with a EPS loss of $0.02, well below the firms estimate of a gain of $0.03 and the Street's of a gain of $0.01. The miss was largely due to comp store sales falling by 13.2 percent, much higher than the 9 percent decline that the firm was anticipating.
Management highlighted that its new store productivity is above 100 percent, but the firm is forecasting that the new stores may be comping negatively in two years.
HGG reiterated its 2012 guidance of 15-20 percent sales growth and EPS of $1.20-$1.35 with a negative 3 percent to flat comp and unit growth of 35 to 40 stores.
The firm is lowering its Q2 and FY12 EPS estimates from $0.09 and $1.32 to $0.05 and $1.17. Jefferies also cut its 2013 estimate from $1.50 to $1.40.
An analyst at Jefferies comments, "Below-plan sales and earnings continue to undermine the growth story as investors discount shares heavily on doubts around this sector. While we are encouraged by the performance of tablets and the fact that new store productivity is greater than 100%, it’s unlikely we’ll see a growth multiple here until comps show meaningful improvement."
For more ratings news on hhgregg click here and for the rating history of hhgregg click here.
Shares of hhgregg closed at $11.14 yesterday.
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