Conn's, Inc. Reports Record Retail Gross Margin in Quarter Ended October 31, 2012
Same store sales up 12.6% over prior year
Retail gross margin approximately 35% for quarter
Net sales for the three months ended
"We delivered our fifth straight quarter of double-digit, year-over-year
same store sales growth," commented
The retail gross margin, which includes gross profit from both product
and repair service agreement sales, was approximately 35% for the three
months ended
The following table presents net sales by category and changes in net sales for the quarter:
|
Quarter ended |
Same store | ||||||||||||||||||||||
| 2012 | % of Total | 2011 | % of Total | Change | % Change | % change | |||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||||||
| Home appliance | $ | 48,499 | 29.0 | % | $ | 46,993 | 30.3 | % | $ | 1,506 | 3.2 | % | 6.4 | % | |||||||||
| Furniture and mattress | 32,346 | 19.3 | % | 24,567 | 15.9 | % | 7,779 | 31.7 | % | 34.0 | % | ||||||||||||
| Consumer electronic | 47,082 | 28.1 | % | 50,073 | 32.3 | % | (2,991 | ) | (6.0 | )% | (3.2 | )% | |||||||||||
| Home office | 16,169 | 9.7 | % | 13,242 | 8.6 | % | 2,927 | 22.1 | % | 27.5 | % | ||||||||||||
| Other | 7,567 | 4.5 | % | 5,529 | 3.6 | % | 2,038 | 36.9 | % | 59.8 | % | ||||||||||||
| Total product sales | 151,663 | 90.6 | % | 140,404 | 90.7 | % | 11,259 | 8.0 | % | 11.5 | % | ||||||||||||
| Repair service | |||||||||||||||||||||||
| agreement commissions | 12,183 | 7.3 | % | 10,601 | 6.8 | % | 1,582 | 14.9 | % | 23.1 | % | ||||||||||||
| Service revenues | 3,477 | 2.1 | % | 3,950 | 2.5 | % | (473 | ) | (12.0 | )% | |||||||||||||
| Total net sales | $ | 167,323 | 100.0 | % | $ | 154,955 | 100.0 | % | $ | 12,368 | 8.0 | % | 12.6 | % | |||||||||
The following provides a summary of items influencing the Company's major product categories during the quarter, compared to the same quarter last fiscal year:
- Home appliance average selling price rose 24.4%, partially offset by a 17.4% decline in unit volume. Previous store closures caused approximately one-quarter of the decrease in unit sales. On a same store basis, laundry sales rose 14.9%, refrigeration sales increased 3.6% and cooking sales increased 24.7%. Milder temperatures drove a 26.0% decline in room air conditioner sales;
-
Enhanced presentation and product selection together with increased
promotional activity drove continued growth in furniture and mattress
sales. Previous store closures tempered the reported increase.
- Furniture same store unit sales increased 16.4% and there was a 15.2% increase in the average sales price.
- On a same store basis, the average mattress selling price increased 41.6% with a 5.4% decline in unit volume — driven by a shift to a higher price-point product offering;
- Consumer electronic sales declined due primarily to the emphasis of higher price-point televisions and previous store closures. Same store sales of televisions with a screen size of over 50 inches rose on both a unit and dollar basis; and
- Higher tablet sales and a 28.0% increase in the average selling price of computers guided the growth in home office sales. The reported growth was partially offset by the impact of store closures, a reduction 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
About Conn's, Inc.
Conn's is a specialty retailer and operated 65 retail locations at
- Home appliance, including refrigerators, freezers, washers, dryers, dishwashers, ranges and room air conditioners;
- Furniture and mattress, including furniture for the living room, dining room, bedroom and related accessories and mattresses;
- Consumer electronic, including LCD, LED, 3-D, plasma and DLP televisions, camcorders, digital cameras, Blu-ray players, video game equipment, portable audio and home theater products; 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 include information concerning our financial performance, business strategy, plans, goals and objectives. Statements containing the words "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "plan," "project," "should," or the negative of such terms or other similar expressions are generally forward-looking in nature and not historical facts. Although we believe that the expectations, opinions, projections, and comments reflected in these forward-looking statements are reasonable, we can give no assurance that such statements will prove to be correct. 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, we are not obligated to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date of this press release or to reflect the occurrence of unanticipated events.
CONN-F
Conn's, Inc.
Chief Financial Officer
or
Investors:
Source: Conn's, Inc.
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