) is leaving no stone unturned to revive its struggling business.
Initiatives such as product innovation, focus on developing brands,
exit from underperforming businesses and store openings are some of
the measures taken by the company to boost sales. Most recently,
hhgregg opened a store at 9501 Colerain Avenue in Cincinnati's
In order to celebrate the new store opening and attract
customers, the company will be offering special discounts in all
its stores in Cincinnati through Jul 19, 2014 on hhgregg's wide
selection of televisions, appliances and electronics, as well as a
new selection of wearable technology including the Jawbone Up24 and
Samsung Galaxy Gear watch. Also, the first 250 customers visiting
the store will receive a $10 hhgregg gift card.
The company always celebrates the opening of its stores and
offers great discounts. This is surely an innovative solution to
attract customers and drive sales. However, we note that hhgregg
has been delivering disappointing results in the consumer
electronic category since the past one year due to
lower-than-expected margins and declining industry demand for flat
screen televisions. Weak promotional activities are also adding to
the woes. In addition, lack of innovation in televisions has been
severely impacting overall store traffic.
The company has also witnessed sluggishness in same store sales
in the computing and wireless category in all the quarters of
fiscal 2014. A decline in the demand for laptops and lower
average selling price for tablets resulted in weak comps. Category
comps declined due to the underperforming contract-based mobile
phone business, which the company exited during the fourth
The company's home products category, which showed signs of
weakness during the third quarter declined further in the fourth
The company is therefore employing different initiatives to
revive its business, besides store openings. It recently
hired Troy H. Risch as its new chief operating officer (COO), whose
experience is expected to help the company execute its initiatives.
The company will be increasing focus on its appliance category,
which has continued to gain market share over the past 11 quarters.
hhgregg has a Zacks Rank #3 (Hold).
A better-ranked consumer electronics retailer is
) which holds a Zacks Rank #2 (Buy). Some other retailers worth
J. C. Penney Company, Inc.
), both with a Zacks Rank #2.
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