AlphaNinja - Electronics retailer HHGregg (HGG) announced earlier this week that it would be increasing its planned store openings for this fiscal year. You read that right - as the US consumer is facing his/her worst environment in a generation, this retailer is expanding.
The company upped its planed store openings for the current fiscal year to 20-22, from a previous plan of 16-18. 19% growth in new stores would seem to be a crazy decision in this environment, but the company is taking advantage of Circuit City's demise:
HHGregg IPO'd about 2 years ago, and it's shares have beat the pants off the general market:
One reason for the stock outperformance - the company has grown earnings. In addition, the company's gross margin is 6 percent higher than Best Buy (BBY), the category leader. Best Buy makes up for it on scale however, as the companies have nearly identical operating margins.
The stock trades at a what I consider to be a modest 15PE - modest because the company is in a hyper-growth mode. I'll pass on this stock because huge capital spending results in a tiny FCFY, but the company has operated impressively in this environment, and looks to be making an aggressive but potentially lucrative move with this expansion.