Conn’s, Inc. (NASDAQ: CONN), a specialty retailer of consumer electronics, home appliances, furniture, mattresses, computers and lawn and garden products today announced its operating and financial results for the quarter ended January 31, 2012.
Significant items for the fourth quarter of fiscal 2012 include:
- Adjusted diluted earnings per share of $0.34, excluding store closing costs and long-lived asset impairment charges, compared to an adjusted diluted loss per share of $0.00 for the same period in the prior fiscal year;
- Total revenues increased 3.7% to $226.7 million, compared to the same period in the prior fiscal year;
- Same store sales increased 12.1%;
- Adjusted retail gross margin increased 460 basis points to 29.7%;
- Retail segment adjusted operating income, excluding store closing costs and long-lived asset impairment charges, increased to $9.3 million, compared to $2.1 million for the same quarter in the prior fiscal year;
- Credit segment operating income increased to $12.2 million, compared to $6.7 million for the same quarter in the prior fiscal year; and
- The Company increased earnings guidance for fiscal year 2013 to adjusted diluted earnings per share of $1.20 to $1.30.
“We are pleased to report improved profitability in both our credit and retail segments,” stated Theodore M. Wright, the Company’s Chairman and Chief Executive Officer. “Sales and gross margins are increasing. Combined February and March same store sales grew 16.1% and retail gross margin for the first quarter of fiscal 2013 to date is above fourth quarter of fiscal 2012 levels. We are on track with our store opening plans and are looking forward to returning to unit growth after a period of retrenchment.”
Retail Segment ResultsThe increase in net sales during the quarter was driven by higher average selling prices in all major categories and increased furniture and mattress unit sales. The retail segment’s adjusted retail gross margin increased to 29.7% in the current-year quarter, from 25.1% in the same quarter of the prior year (the retail gross margins presented have been revised to reflect certain vendor rebates that were previously reported as a reduction of advertising expense in Selling, general and administrative expense, as a reduction of Cost of goods sold). The increase in the retail gross margin was driven by an increase in higher-margin furniture and mattress sales as a percent of total product sales, improved product gross margins and increased sales penetration of repair service agreements. During January 2012, the Company closed five underperforming locations, resulting in $5.1 million of store closing costs and long-lived asset impairment charges.
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