Appliance and electronics retailer, hhgregg, Inc. (HGG) is offering lucrative discounts for Labor Day, i.e. the first Monday of September, which falls on Sep 1. The retailer is offering up to 30% off on purchases made in stores and online during the Labor Day Sale, which will run through Sep 6, 2014. In addition to 30%, the company is giving an additional 5% discount on purchasing appliances, furniture and Serta mattresses that are priced $497 and above. Customers using the hhgregg credit card can also avail 24 months special financing on purchases above $297.
Customers can choose from a wide variety of hhgregg’s home appliances, laptops, refrigerators, curved-screen Ultra HD TVs, wearable technology and a brand new fall furniture collection. hhgregg is well-known for offering superior in-store customer service. Apart from this, hhgregg will provide free delivery on appliance purchases during the Labor Day Sale.
However, we note that hhgregg has been disappointing its investors for more than a year with sluggish results, particularly due to its consumer electronic category. Revenues or growth in the category has declined due to lower-than-expected margins and declining industry demand for flat screen televisions. Weak promotional activities are also adding to its woes. In addition, lack of innovation in televisions has been severely impacting overall store traffic.
The company also witnessed sluggishness in same-store sales in the computing and wireless category in the last five quarters. The company’s home products category is also showing signs of weakness.
The company, on its part, 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. hhgregg's initiative to offer discounts for Labor Day will definitely boost sales and drive traffic.
hhgregg holds a Zacks Rank #5 (Strong Sell).
Some better-ranked companies in the retail sector include Citi Trends, Inc. (CTRN), Mens Wearhouse Inc. (MW) and Foot Locker, Inc. (FL). While Citi Trends and Mens Wearhouse sport a Zacks Rank #1 (Strong Buy), Foot Locker holds a Zacks Rank #2 (Buy).
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