Conn’s, Inc. (NASDAQ/NM: 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 October 31, 2011.
Retail segment net sales for the quarter ended October 31, 2011, of $155.0 million, increased $17.1 million, or 12.4%, as compared to the quarter ended October 31, 2010. 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, excluding four stores that have been closed, one store in the process of being closed and two stores with leases that expired during the current fiscal year) increased 18.9% for the quarter ended October 31, 2011, as compared to the same quarter in the prior year period. Some of the factors impacting the Company’s sales performance during the quarter were as follows:
- Increases in advertising and sales staffing to accelerate sales volume growth;
- 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 the current fiscal year, as the Company has been able to retain a portion of the sales from the closed locations.
“We showed this quarter that we are beginning to gain market share, and did so while maintaining retail gross margins within our forecasted range,” commented Theodore Wright, Conn’s Chairman.
The Company previously provided earnings guidance for the fiscal year ending January 31, 2012, of adjusted diluted earnings per share of $0.65 to $0.75, which excludes charges related to the refinancing it completed during the second quarter, costs related to completed and future store closings and the impact of the adoption of accounting guidance related to troubled debt restructuring, which is required to be implemented in the current fiscal year. The troubled debt restructuring guidance, FASB Accounting Standards Update 2011-02, requires that an impairment loss be recorded based on an estimate of the present value of a loan’s expected future cash flows, for loans that qualify as restructured under the guidance. The Company intends to update its earnings guidance for the current fiscal year, as appropriate, and provide initial guidance for fiscal year 2013 when it issues its earnings release for the quarter ended October 31, 2011.