Conn’s, Inc. (NASDAQ:CONN), a specialty retailer of home appliances, furniture, mattresses, consumer electronics and provider of consumer credit, today announced its results for the quarter ended October 31, 2012.
Significant items for the third quarter of fiscal 2013 include:
- Same store sales rose 12.6% over the prior quarter, on top of same store sales growth of 18.9% a year ago;
- Total revenues increased 10.6% to $206.4 million;
- Retail gross margin was 35.5%;
- Adjusted retail segment operating income was $12.9 million, up $13.8 million on an adjusted basis over the prior-year quarter;
- Credit segment operating income totaled $11.6 million, compared to adjusted operating income of $5.6 million for the prior-year period;
- Diluted earnings per share of $0.35 on a reported basis, versus loss of $0.40 per share last year; and
- Fiscal year 2013 earnings guidance was raised to diluted earnings per share of $1.55 to $1.60 on an adjusted basis.
“Our Conn’s HomePlus store in Albuquerque has performed well since opening in November. This week we will open three additional stores,” stated Theodore M. Wright, Chairman and CEO. “We continue to see sales growth in our existing store base. November same store sales rose 6% on top of same store growth of 10% last year.”
Retail Segment ResultsRevenues were $167.7 million for the quarter, up $12.6 million, or 8.2% over last year. This growth was driven by a 31.7% increase in furniture and mattress sales and, to a lesser extent, higher customer demand for home office equipment and appliances. Reported net sales during the current quarter also reflects the benefit of the opening of a Conn’s HomePlus TM store in Waco, Texas in mid-June and the completion of 15 store remodels over the past year. The reported revenue growth was partially offset by the impact of previous store closures. Retail gross margin was 35.5% in the current-year quarter compared to 25.3% in the prior-year. During the three months ended October 31, 2011, the Company adjusted its inventory valuation reserve – reducing retail gross margin for the prior-year period and benefiting the reported margin expansion in the current-year period by 300 basis points. Margin expansion was reported within each of the major product categories. The margin improvement across all categories was driven by the focus on higher price-point, higher-margin products and sourcing opportunities. Growth in higher-margin furniture and mattress sales outpaced the overall increase realized in the other product categories, also favorably impacting retail gross margin.