Conn's, Inc. Reports Retail Segment Net Sales Results for the Quarter Ended January 31, 2012
BEAUMONT, Texas--(BUSINESS WIRE)--
Conn's, Inc. (NASDAQ: CONN), a specialty retailer of consumer
electronics, home appliances, furniture, mattresses, computers and lawn
and garden products, today announced its retail segment net sales
results for the quarter ended January 31, 2012.
Retail segment net sales for the quarter ended January 31, 2012, of
$189.5 million, increased $7.6 million, or 4.2%, compared to the quarter
ended January 31, 2011. Retail segment net sales represent total product
sales, repair service agreement commissions (excluding the impact of
repair service agreement cancellations due to credit charge-offs) and
service revenues. Same store sales (sales recorded in stores operated
for the entirety of both periods, which excludes nine stores that have
been closed, one store in the process of being closed and two stores
with leases that expired during fiscal year 2012) increased 12.1% for
the quarter ended January 31, 2012, compared to the same quarter in the
prior fiscal year. Factors impacting the Company's sales performance
during the quarter were as follows:
-
Continued increases in average selling prices in all major categories;
-
Improved and expanded product selection in the Furniture and
Mattresses category; and
-
Same store sales benefitted from the store closures completed during
fiscal year 2012, as the Company has been able to retain a portion of
the sales from the closed locations.
"Despite weakness in the consumer market for televisions, we were
pleased to deliver double digit same store sales growth for the second
quarter in a row. In addition to the same store sales increase, we also
increased our retail segment gross margin percentage by 500 basis
points, or 21%," commented Theodore Wright, Conn's CEO.
The retail segment gross margin, which includes gross profit from both
product and repair service agreement sales, was approximately 29.0% for
the quarter ended January 31, 2012, compared to 24.0% in the quarter
ended January 31, 2011. The following table presents net sales by
category and changes in net sales for the quarter:
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Quarter ended January 31,
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Same store
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2012
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% of Total
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2011
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% of Total
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Change
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% Change
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% change
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(dollars in thousands)
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Consumer electronics
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$
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76,754
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40.5
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%
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$
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90,707
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49.9
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%
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$
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(13,953
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)
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-15.4
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%
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-9.8
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%
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Home appliances
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44,798
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23.6
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%
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38,767
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21.3
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%
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6,031
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15.6
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%
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21.2
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%
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Furniture and mattresses
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27,746
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14.7
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%
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20,160
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11.1
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%
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7,586
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37.6
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%
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46.0
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%
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Home office
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18,777
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9.9
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%
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15,200
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8.3
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%
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3,577
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23.5
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%
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29.8
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%
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Other
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5,161
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2.7
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%
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4,117
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2.3
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%
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1,044
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25.4
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%
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33.1
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%
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Total product sales
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173,236
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91.4
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%
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168,951
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92.9
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%
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4,285
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2.5
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%
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9.0
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%
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Repair service
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agreement commissions
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12,629
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6.7
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%
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9,179
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5.0
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%
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3,450
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37.6
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%
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38.5
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%
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Service revenues
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3,596
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1.9
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%
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3,778
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2.1
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%
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(182
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)
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-4.8
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%
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Total net sales
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$
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189,461
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100.0
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%
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$
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181,908
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100.0
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%
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$
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7,553
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4.2
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%
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12.1
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%
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Note: The amounts in the table reflect the results of the Company's
retail segment.
The following is a summary of some of the items impacting the Company's
key categories during the quarter, compared to the same quarter in the
prior fiscal year:
-
Consumer electronics category sales decreased primarily as a result of
a 30.6% decrease in the unit sales of televisions, while the average
selling price increased 23.4%. The unit sales decrease was driven
largely by the Company's decision not to compete for low-priced,
low-margin sales during the fourth quarter, in general, and
specifically on Black Friday. Also, contributing to the decrease was a
reduction in gaming hardware and software sales, partially offset by
an increase in home theater sales;
-
Home appliance category sales increased during the quarter on a 21.5%
increase in the average selling price, partially offset by a 3.3%
decrease in unit sales. Laundry sales were up 25.1%, refrigeration
sales were up 13.3% and cooking sales were up 13.6%;
-
The growth in furniture and mattress sales was driven by enhanced
displays and product selection, and increased promotional activity,
resulting in a 20.2% increase in unit sales of furniture and
mattresses, combined with a 16.2% increase in the average selling
price; and
-
Home office sales grew primarily as a result of the expansion of
tablet sales, and a 25.3% increase in the average selling price of
laptop and desktop computers and netbooks, as the unit sales of those
products decreased by 12.5%.
All of the above amounts are preliminary estimates and are subject to
change upon completion of the Company's quarterly financial statement
closing process. Actual results may differ significantly from the
preliminary estimates.
The Company has posted an updated investor presentation on its website
at ir.Conns.com.
The Company will host a conference call and audio webcast on Tuesday,
April 3, 2012, at 10:00AM, CT, to fully discuss its earnings and
operating performance for the quarter. The webcast will be available
live at ir.Conns.com
and will be archived for one year. Participants can join the call by
dialing 877-754-5302 or 678-894-3020.
About Conn's, Inc.
The Company is a specialty retailer currently operating 65 retail
locations in Texas, Louisiana and Oklahoma: with 22 stores in the
Houston area, 15 in the Dallas/Fort Worth Metroplex, seven in San
Antonio, three in Austin, five in Southeast Texas, one in Corpus
Christi, four in South Texas, six in Louisiana and two in Oklahoma. The
Company's primary product categories include:
-
Home appliances, including refrigerators, freezers, washers, dryers,
dishwashers and ranges;
-
Consumer electronics, including LCD, LED, 3-D, plasma and DLP
televisions, camcorders, digital cameras, Blu-ray and DVD players,
video game equipment, portable audio, MP3 players and home theater
products;
-
Furniture and mattresses, including furniture for the living room,
dining room, bedroom and related accessories and mattresses; and
-
Home office, including desktop, notebook, netbook and tablet
computers, printers and computer accessories.
Additionally, the Company offers a variety of products on a seasonal
basis, including lawn and garden equipment, and continues to introduce
additional product categories for the home to help respond to its
customers' product needs and to increase same store sales. Unlike many
of its competitors, the Company provides flexible in-house credit
options for its customers, in addition to third-party financing programs
and third-party rent-to-own payment plans. In the last three years, the
Company financed, on average, approximately 60% of its retail sales
under its in-house financing plan.
This press release contains forward-looking statements that involve
risks and uncertainties. Such forward-looking statements generally can
be identified by the use of forward-looking terminology such as "may,"
"will," "expect," "intend," "could," "estimate," "should," "anticipate,"
or "believe," or the negative thereof or variations thereon or similar
terminology. Although the Company believes that the expectations
reflected in such forward-looking statements will prove to be correct,
the Company can give no assurance that such expectations will prove to
be correct. The actual future performance of the Company could differ
materially from such statements. Factors that could cause or contribute
to such differences include, but are not limited to:
-
the Company's growth strategy and plans regarding opening new
stores and entering new markets;
-
the Company's intention to update, relocate or expand existing
stores;
-
the effect of closing or reducing the hours of operation of
existing stores;
-
the Company's estimated capital expenditures and costs related to
the opening of new stores or the update, relocation or expansion of
existing stores;
-
the Company's ability to introduce additional product categories;
-
sales trends in the home appliances, consumer electronics and
furniture and mattress industries and the Company's ability to respond
to those trends;
-
the pricing actions and promotional activities of competitors;
-
relationships with the Company's key suppliers;
-
delinquency and loss trends in the receivables portfolio;
-
the Company's ability to offer flexible financing programs;
-
changes in the Company's collection practices and policies;
-
the Company's ability to amend, renew or replace its existing
credit facilities before the maturity dates of the facilities;
-
the Company's ability to fund operations, debt repayment and
expansion from cash flow from operations, borrowings on its revolving
lines of credit and proceeds from securitizations and from accessing
debt or equity markets;
-
the ability of the Company to obtain additional funding for the
purpose of funding the receivables generated by the Company;
-
the ability of the Company to maintain compliance with the
covenants in its financing facilities or obtain amendments or waivers
of the covenants to avoid violations or potential violations of the
covenants;
-
reduced availability under the Company's credit facilities as a
result of borrowing base requirements and the impact on the borrowing
base calculation of changes in the performance or eligibility of the
customer receivables financed by that facility;
-
the ability of the financial institutions providing lending
facilities to the Company to fund their commitments;
-
the effect on borrowing costs of downgrades by rating agencies or
changes in laws or regulations on the Company's financing providers;
-
the cost of any amended, renewed or replacement credit facilities;
-
interest rates;
-
general economic and financial market conditions;
-
weather conditions in the Company's markets;
-
the outcome of litigation or government investigations;
-
changes in the Company's stock price; and
-
the actual number of shares of common stock outstanding.
Further information on these risk factors is included in the
Company's filings with the Securities and Exchange Commission, including
the Company's annual report on Form 10-K filed on April 1, 2011. You are
cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date of this press release.
Except as required by law, the Company is not obligated to publicly
release any revisions to these forward-looking statements to reflect the
events or circumstances after the date of this press release or to
reflect the occurrence of unanticipated events.
CONN-F
Conn's, Inc., Beaumont
Chief Financial Officer
Mike Poppe,
(409) 832-1696 Ext. 3294
or
Investors:
S.M. Berger &
Company
Andrew Berger, (216) 464-6400
Source: Conn's, Inc.
News Provided by Acquire Media
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