Has hhgregg, Inc. (HGG) Become the Perfect Stock? – Sears Holdings Corporation (SHLD), Best Buy Co., Inc. (BBY)

Since we looked at hhgregg last year, the company hasn’t been able to regain the point it lost from 2011 to 2012. The stock has also struggled, falling 10% over the past year despite a pretty strong rebound in recent months.

Like most other electronics retailers, hhgregg, Inc. (NYSE:HGG) has been dealing with the strain of competition from online retail. Given the cost handicap of having brick-and-mortar stores, electronics retailers have suffered from margin pressure and an inability to compete solely on price.

Various ways to address those pressures have had mixed success. Appliances offer an additional draw, as ordering big items online is somewhat challenging. But neither hhgregg nor Sears Holdings Corporation (NASDAQ:SHLD), with its immensely popular Kenmore brand, has been able to use its appliance strength to make a big impact on results. For hhgregg, though, an attempt to focus on certain cities and offer high levels of customer service hasn’t produced good results. Comparable-store sales fell 9.7% during the holiday quarter on a 23% drop in net income.

For its part, industry leader Best Buy Co., Inc. (NYSE:BBY) has tried promoting its own online sales. It showed some success during the holiday season, with reports saying its website was among the top-traffic sites on Black Friday and Cyber Monday. Given its flat same-store sales, a change in strategy seems like the best way for Best Buy Co., Inc. (NYSE:BBY) to try to boost its results.

For hhgregg to improve, it needs to come up with a new strategy to boost sales and stand up to online competition — or join it by boosting its own online presence. The company’s recent move to implement a price-match guarantee that includes online retailers is only likely to threaten margins further, making it hard to imgagine hhgregg, Inc. (NYSE:HGG) moving closer to perfection anytime soon.

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The article Has hhgregg Become the Perfect Stock? originally appeared on Fool.com and is written by Dan Caplinger.

Fool contributor Dan Caplinger has no position in any stocks mentioned. The Motley Fool recommends hhgregg.

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