Conn's, Inc. Reports Record Retail Gross Margin in Quarter Ended January 31, 2013
Same store sales up 7% over prior year
Retail
gross margin approximates 36.5% for quarter
Net sales were
Our execution of new store openings improved. The average store effectiveness of stores opened in fiscal 2013 exceeded 200% in January — the first full month all were open. In addition, all new stores were at least 100% effective. Three of the four stores that we opened in the fourth quarter were among our top five stores in January."
Retail gross margin approximated 36.5% for the quarter ended
The following table presents net sales by category, changes in net sales and store count activity for the current and prior-year quarter:
|
Three Months ended |
Same store | |||||||||||||||||||||||||||||||||||
| 2013 | % of Total | 2012 | % of Total | Change | % Change | % change | ||||||||||||||||||||||||||||||
| (dollars in millions) | ||||||||||||||||||||||||||||||||||||
| Home appliance | $ | 50.4 | 24.2 | % | $ | 44.9 | 23.7 | % | $ | 5.5 | 12.2 | % | 11.9 | % | ||||||||||||||||||||||
| Furniture and mattress | 39.9 | 19.1 | 25.9 | 13.6 | 14.0 | 54.1 | 40.2 | |||||||||||||||||||||||||||||
| Consumer electronic | 72.4 | 34.7 | 78.1 | 41.2 | (5.7 | ) | (7.3 | ) | (10.5 | ) | ||||||||||||||||||||||||||
| Home office | 22.6 | 10.9 | 19.5 | 10.3 | 3.1 | 15.9 | 12.6 | |||||||||||||||||||||||||||||
| Other | 4.5 | 2.2 | 5.1 | 2.7 | (0.6 | ) | (11.8 | ) | (12.7 | ) | ||||||||||||||||||||||||||
| Total product sales | 189.8 | 91.1 | 173.5 | 91.5 | 16.3 | 9.4 | 5.9 | |||||||||||||||||||||||||||||
| Repair service | ||||||||||||||||||||||||||||||||||||
| agreement commissions | 15.7 | 7.5 | 12.6 | 6.6 | 3.1 | 24.6 | 22.5 | |||||||||||||||||||||||||||||
| Service revenues | 2.9 | 1.4 | 3.6 | 1.9 | (0.7 | ) | (19.4 | ) | ||||||||||||||||||||||||||||
| Total net sales | 208.4 | 100.0 | % | 189.7 | 100.0 | % | $ | 18.7 | 9.9 | % | 7.0 | % | ||||||||||||||||||||||||
| Number of stores- | ||||||||||||||||||||||||||||||||||||
| Beginning of period | 65 | 71 | ||||||||||||||||||||||||||||||||||
| Opened | 4 | - | ||||||||||||||||||||||||||||||||||
| Closed | (1 | ) | (6 | ) | ||||||||||||||||||||||||||||||||
| End of period | 68 | 65 | ||||||||||||||||||||||||||||||||||
The following provides a summary of items influencing the Company's major product categories during the quarter, compared to the prior-year period:
- Home appliance average selling price increased 21.5%, partially offset by a 7.3% reduction in unit volume. Laundry sales were up 9.5%, refrigeration sales rose 15.8% and cooking sales increased 18.6%;
- Furniture unit sales rose 35.4% and the average selling price increased 17.8%;
- The average mattress selling price increased 35.5% and unit volume was up 3.5%;
- Consumer electronic sales declined primarily due to reduced industry-wide demand. Sales of televisions with a screen size of over 60 inches rose 39.5% and accounted for almost half of television revenues during the current quarter; and
- Tablet sales increased 139.3%, partially offset by 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 annual 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 currently operating 68 retail locations
in
- Home appliance, including refrigerators, freezers, washers, dryers, dishwashers and ranges;
- Furniture and mattress, including furniture and related accessories for the living room, dining room and bedroom as well as both traditional and specialty mattresses;
- Consumer electronic, including LCD, LED, 3-D and plasma televisions, Blu-ray players, home theater and video game products, camcorders, digital cameras, and portable audio equipment; and
- Home office, including computers, tablets, printers and accessories.
Additionally, the Company offers a variety of products on a seasonal basis, including lawn and garden equipment, room air conditioners and outdoor furniture. 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.
This press release contains forward-looking statements that involve
risks and uncertainties. Such forward-looking statements include
information concerning our future 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. A wide variety of potential risks,
uncertainties, and other factors could materially affect our ability to
achieve the results either expressed or implied by our forward-looking
statements including, but not limited to: general economic conditions
impacting our customers or potential customers; our ability to continue
existing or offer new customer financing programs; changes in the
delinquency status of our credit portfolio; higher than anticipated net
charge-offs in the credit portfolio; the success of our planned opening
of new stores and the updating of existing stores; technological and
market developments and sales trends for our major product offerings;
our ability to fund our operations, capital expenditures, debt repayment
and expansion from cash flows from operations, borrowings from our
revolving credit facility, and proceeds from accessing debt or equity
markets; and the other risks detailed from time-to-time in our
CONN-F
Conn's, Inc.:
Chief Financial
Officer
or
Investors:
Source: Conn's, Inc.
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