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hhgregg Inc

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hhgregg reported narrower-than-expected loss in the first quarter of fiscal 2017. Sales matched the Zacks Consensus Estimate. Adjusted loss of $0.21 per share was however wider than the prior year quarter loss of $0.17 per share, due to a decline in sales and comparable store sales (comps). While comps declined in the quarter, it was narrower than the preceding quarter decline. This was due to improved momentum, especially in the appliance category. Cost savings initiatives also moderated losses in the quarter. We are encouraged by hhgregg’s strategic initiatives to boost sales and profits. As a result of these initiatives, the company is generating positive EBITDA results since the past five quarters and expects to generate positive EBITDA in the coming quarters as well. However, we believe that any sort of improvement in comps will take time as the company is under a lot of pressure and facing volatility.

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