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hhgregg (HGG) Strategic Efforts Bode Well: Should You Add?

Zacks Equity Research

hhgregg, Inc. HGG appears promising buoyed by its strategic efforts and savings initiatives. The stock carries a Zacks Rank #2 (Buy) and has a long-term earnings growth rate of 10%. Also, the share price has rallied nearly 22% over the past three months.

HHGREGG INC Price and Consensus

 

HHGREGG INC Price and Consensus | HHGREGG INC Quote

Strategic Efforts

hhgregg has taken several initiatives to revive its business, which encompass driving store traffic, enhancing brand recognition, cost containment and  multi-channel approach. Notably, product innovation, discounts and promotional offers, improvement in home-delivery facilities, exit from underperforming businesses and store openings are some of the measures undertaken by the company to boost sales.

The company’s strategic efforts have led to improvement in its appliances, premium TV and furniture categories. Also, the company has started displaying furniture at the front part of its stores, making it easier for customers to see the assortment immediately after entering the location. Further, the company is revamping its stores in order to drive overall sales. hhgregg expects the home products category, specifically furniture, to aid growth in the upcoming quarters.

Moreover, hhgregg is focused on innovations like 4K ultra high definition, curve TVs and OLED TVs to boost category sales of consumer electronics. The company will continue to utilize its financing options to drive sales in consumer electronics business. Further, to revive the appliance business, the company plans to refresh the assortment across channels while continuing to enhance its product selection by creating additional Fine Lines departments.

Alongside, hhgregg has been focusing on its e-commerce business. Also, the company has invested in infrastructure upgrades, additional web application capabilities, expansion of the assortment and a new mobile app to boost the e-commerce business.

We note that hhgregg has been reporting losses and declining revenues for the past many quarters, primarily due to weak comparable store sales. However, we believe that the company has undertaken strategic endeavors to bring itself back on the growth trajectory.  

Other Stocks to Consider

Other favorably placed stocks in the retail sector include Urban Outfitters Inc. URBN, Tilly's, Inc. TLYS and The Children's Place, Inc. PLCE, all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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