Conn's, Inc. Reports Net Sales for the Quarter Ended April 30, 2012
BEAUMONT, Texas--(BUSINESS WIRE)--
Conn's, Inc. (NASDAQ: CONN), a specialty retailer of home appliances,
furniture, mattresses, consumer electronics, computers and lawn and
garden products, today announced its net sales for the three months
ended April 30, 2012.
Net sales rose $9.8 million, or 6.2%, to $166.9 million for the quarter
ended April 30, 2012, from the comparable prior-year period. Net sales
represent total product sales, repair service agreement commissions and
service revenues. Same store sales (sales recorded in stores operated
for the entirety of both periods, excluding one store in the process of
being closed) for the quarter ended April 30, 2012 increased 17.8% over
the same period in 2011. Factors influencing the Company's
year-over-year net sales performance include the following:
-
Continued expansion in average selling prices across the major
categories;
-
Improved and expanded product selection in the furniture and
mattresses category; and
-
Same store sales benefited from the closure of 11 stores during fiscal
year 2012, as the Company has been able to retain a portion of the
sales from the closed locations.
"We achieved 17.8% same store sales growth despite continued weakness in
TV sales," commented Theodore M. Wright, the Company's Chairman and CEO.
"Our retail operations delivered gross margins above our annual guidance
driven by a favorable shift in product mix during the quarter."
The retail gross margin, which includes gross profit from both product
and repair service agreement sales, was approximately 33.5% for the
quarter ended April 30, 2012, compared to 30.5% in the quarter ended
April 30, 2011. Certain of the Company's vendors provide higher
promotional assistance during the first quarter of each fiscal year
which benefited retail gross margin by approximately 150 basis points in
both periods. The following table presents net sales by category and
changes in net sales for the quarter:
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Quarter ended April 30,
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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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52,445
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31.4
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%
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$
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58,133
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37.0
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%
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$
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(5,688
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)
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(9.8
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)%
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(0.2
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)%
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Home appliances
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48,293
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28.9
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%
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45,133
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28.7
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%
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3,160
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7.0
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%
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16.7
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%
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Furniture and mattresses
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28,446
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17.0
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%
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21,970
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14.0
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%
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6,476
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29.5
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%
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43.1
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%
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Home office
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12,150
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7.3
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%
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11,109
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7.0
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%
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1,041
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9.4
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%
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19.9
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%
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Other
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10,778
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6.5
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%
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7,934
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5.1
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%
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2,844
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35.8
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%
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47.3
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%
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Total product sales
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152,112
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91.1
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%
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144,279
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91.8
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%
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7,833
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5.4
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%
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16.0
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%
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Repair service agreement commissions
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11,323
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6.8
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%
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8,902
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5.7
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%
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2,421
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27.2
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%
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36.8
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%
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Service revenues
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3,430
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2.1
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%
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3,889
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2.5
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%
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(459
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)
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(11.8
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)%
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Total net sales
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$
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166,865
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100.0
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%
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$
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157,070
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100.0
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%
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$
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9,795
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6.2
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%
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17.8
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%
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The following provides a summary of items impacting the Company's key
categories during the quarter, compared to the same quarter in the prior
fiscal year:
-
Consumer electronics sales decreased due primarily to the closure of
11 stores in fiscal year 2012. On a same store basis, sales were
comparable with growth in home theater and television sales offset by
a reduction in gaming hardware and accessory item sales. With the
Company's decision not to compete for low-priced, low-margin
television sales during the current quarter, the same store average
selling price for televisions increased 27.4%, while unit sales
declined 21.0%;
-
Home appliance sales increased during the quarter on a 28.7% increase
in the average selling price, partially offset by a 15.9% decrease in
unit sales. Approximately half of the unit sales decline was
attributable to store closures in the prior fiscal year. On a same
store basis, laundry sales were up 20.0%, refrigeration sales were up
15.9% and cooking sales were up 32.1%, while room air conditioner
sales were down 29.8% due to milder temperatures;
-
The growth in furniture and mattress sales was driven by enhanced
displays and product selection, and increased promotional activity.
The reported increase was moderated by the impact of the store
closures. Furniture same store sales growth was driven by a 25.2%
increase in the average sales price and a 12.5% increase in unit
sales. Mattress same store sales also increased reflecting a favorable
shift in product mix with the Company's decision to discontinue
offering low price-point products. The average mattress selling price
was up 69.5%, while unit volume declined 12.1% on a same store basis;
and
-
Home office sales grew primarily as a result of the expansion of
tablet sales and a 24.5% increase in the average selling price of
laptop and desktop computers, partially offset by the impact of store
closures, a decline in computer unit volume and lower sales of
accessory items.
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 will host a conference call and audio webcast on Monday,
June 4, 2012, at 10:00 A.M., CT, to 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 and notebook computers, tablets,
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 61%, including down
payments, 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;
-
changes in product sales or gross margin trends;
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the pricing actions and promotional activities of competitors;
-
relationships with the Company's key suppliers;
-
changes in outstanding balance, delinquency and loss trends in the
receivables portfolio;
-
the Company's ability to offer flexible financing programs;
-
changes in the interest and fee yield earned on the receivables
portfolio;
-
changes in the Company's underwriting and collection practices and
policies;
-
changes in the costs to collect the receivables portfolio;
-
the Company's ability to amend, renew or replace its existing debt
or other credit arrangements before the maturity dates of such
arrangements;
-
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 debt and other credit arrangements or obtain
amendments or waivers of the covenants to avoid violations or
potential violations of the covenants;
-
changes in covenant requirements in future debt and other credit
arrangements;
-
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 debt or other
credit arrangements;
-
interest rates;
-
general economic and financial market conditions, including
conditions in the capital markets;
-
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 12, 2012. 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 Operating Officer
Michael J.
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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