Appliance and electronics retailer, hhgregg, Inc. HGG has been delivering best-in-class product offerings, prices and customer service. Recently, the company partnered with a brand and became its team sponsor.
On Aug 23, hhgregg and Indianapolis 500 champions Andretti Autosport signed a multi-year partnership, under which the former will serve as the lead, co-primary sponsor for Marco Andretti and the No. 27 Honda-powered entry in the Verizon IndyCar Series, and as a team-wide sponsor across all Andretti Autosport IndyCar entries, beginning 2017.
This partnership will strengthen Andretti Autosport’s relationship with hhgregg, which started in 2016, as the former will represent their stores and partners. Further, hhgregg will be the primary sponsor on Marco’s car for half of the races and act as a team sponsor for its entire series.
HHGREGG INC Price and Consensus
HHGREGG INC Price and Consensus | HHGREGG INC Quote
The news comes on the heels of their recent plans to open 25−30 Fine Lines appliance stores over the next two years. hhgregg currently has 14 Fine Lines stores.
There is close association of the Andretti brand, IndyCar race demographics and hhgregg’s Fine Lines target customers. With hhgregg serving as the primary sponsor of Marco’s entry at several IndyCar races, it will also align with Fine Lines markets. This therefore provides the opportunity to execute hhgregg and Fine Lines brand activations. Further, the expansion of these Fine Lines high-performing retail format stores will strengthen hhgregg’s position in the appliance category.
We note that hhgregg has been reporting losses and declining revenues since the past many quarters, primarily due to weak comparable store sales (comps). The company has been witnessing sluggishness in same-store sales at the consumer electronics segment.
Earlier this month, hhgregg reported narrower-than-expected loss in the first quarter of fiscal 2017. Sales matched the Zacks Consensus Estimate. While comps declined in the quarter, the drop was narrower than the preceding quarter. Cost savings initiatives also moderated losses in the reported quarter.
The company is working on several initiatives at the consumer electronics category to revive this difficult segment. These efforts are expected to yield positive results in the consumer electronics space throughout the balance of this fiscal year.
hhgregg currently has a Zacks Rank #2 (Buy).
Other well positioned retailers include Boot Barn Holdings, Inc. BOOT, Foot Locker, Inc. FL and Citi Trends, Inc. CTRN. All three stocks hold the same Zacks Rank as hhgregg.
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