A 19 percent drop in comparable store CE sales...

A 19 percent drop in comparable store CE sales of TVs, audio, personal electronics and accessories contributed to a $10 million fiscal Q1 loss at h.h. gregg, the company said Thursday, while sales of tablets and PCs fell 30 percent year-over-year. The company also had a 2 percent dip in appliance sales, a category h.h. gregg turned to in recent quarters to bolster sagging profits due to lower margins in CE. Sales of home products, including furniture, dipped half a percentage point for the quarter, h.h. gregg said. By segment, the Q1 sales mix was 57 percent appliances, 31 percent CE products, 7 percent PCs and tablets, and 5 percent home products, the company said. The falloff in CE sales was due to a double-digit decline in video unit sales “offset slightly” by an uptick in average selling price on the company’s shift to larger TV screen sizes and premium featured TVs, said CEO Dennis May. Janney analyst David Strasser said h.h. gregg TV sales were also likely down due to Best Buy’s stronger vendor relationships. Janney is optimistic about 4K Ultra HD TV driving holiday sales and believes pricing compression “will be dramatic, driving demand,” Strasser said. “The question is, will profitability remain elevated as the pricing gets aggressive,” he said. Meanwhile, the drop in the computer and tablet category was due to the retailer’s exit from the contract-based mobile phone business and lower demand for PCs, May said. Citing ongoing initiatives to reposition the business around a broader assortment of home products and “continued volatility in the consumer electronics industry,” May chose not to provide guidance for fiscal 2015. But the company now expects annual comp store sales to be “negative high-single digits to negative mid-single digits” compared to previous estimates of negative low-single digits to flat, he said.