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hhgregg Inc

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Estimates have slightly declined over the past 30 days period after hhgregg reported narrower-than-expected loss in the first quarter of fiscal 2017. We note that hhgregg has been reporting losses and declining revenues for the past many quarters, primarily due to weak comparable store sales. Nevertheless, we are encouraged by hhgregg’s strategic initiatives and its savings and revenue initiatives, which focus on stabilizing the business by reversing the negative sales trends, optimizing marketing spending and improving cost structure. These initiatives have generated positive EBITDA results since the past one year and are expected to continue the trend in the near term as well. The company is also backing on its appliance category and has plans to expand its Fine Lines store program to boost sales. However, we believe that any sort of improvement will take time as the company is under a lot of pressure and facing volatility.

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