Shares of hhgregg, Inc. (HGG) reached a new 52-week high of $19.99 on Sep 11 and eventually closed at $19.40, reflecting a year-to-date return of 166.9%. The Zacks Rank #1 (Strong Buy) stock beat its previous 52-week high of $19.41 attained on Aug 26.
Shares of this appliances and electronic retailer have been riding high ever since it reported impressive first quarter fiscal 2014 results on Aug 5. The continued momentum in the shares is due to the company’s strategic initiatives, which pulled the company out from persistent weakness. The company’s long-term estimated EPS growth rate is 14%. Average volume of shares traded over the last three months came in at approximately 288K.
hhgregg reported a loss of 4 cents per share in the first quarter of fiscal 2014, narrower than the prior-year quarter loss of 16 cents per share. The reported loss was also narrower than the Zacks Consensus Loss Estimate of 15 cents per share. The narrower loss was driven by positive comps, cost savings and lower share count.
hhgregg’s net sales beat the Zacks Consensus Estimate and climbed 7.2% year over year, driven by positive comps in the quarter and a turnaround from declines seen in the last few quarters. Moreover, the addition of 18 new stores in the last 12 months also boosted top line growth. Comparable store sales were backed by the strong performance of the appliance category.
Lower operating expenses offset the impact of a decline in gross margins to lead to improved operating margins in the first quarter
The company has also taken up several strategic initiatives, which improved results in the first quarter of fiscal 2014. These initiatives mitigated the effects of the continued weakness in the consumer electronic category, which had been suffering since the past few quarters.
In order to improve overall comps and the performance of the consumer electronics category, the company designed three major initiatives for fiscal 2014 to drive additional traffic and sales. The company intends to increase market share of its appliance category, expand its customer base through advertising campaigns and focus on promoting consumer electronics through compelling offers. hhgregg also intends to increase category sales through its website capabilities.
Other Stocks to Consider
Other stocks in the retail sector that are performing equally well and are worth considering include Kirkland Inc (KIRK), Haverty Furniture Cos. Inc. (HVT) and Fortune Brands Home & Security (FBHS), all of them with a Zacks Rank #1.