Conn’s, Inc. (NASDAQ: CONN), a specialty retailer of home appliances, furniture, mattresses and consumer electronics and provider of consumer credit, today announced its net sales for the three months ended January 31, 2013. Net sales were $208.4 million for the quarter ended January 31, 2013, an increase of $18.7 million, or 9.9%, over the same period last year. Net sales include total product sales, repair service agreement commissions and service revenues. Same store sales (sales recorded in stores operated for the entirety of both periods) for the three months ended January 31, 2013 rose 7.0% over the prior period, on top of same store growth of 12.1% a year ago. January same store sales increased 10.0% with same store sales of consumer electronics down 4.8%. Theodore M. Wright, the Company’s Chairman and CEO commented, “We are pleased to report our sixth consecutive quarterly increase in same store sales. Same store sales increased 7% despite a decline of 11% in same store sales of consumer electronics. Consumer electronics contributed more gross profit than in the prior fourth quarter as increasing gross margin rates more than offset the decline in sales. Home appliances also performed well this quarter, with same store sales up 12%. Fourth quarter furniture and mattress same store sales rose 40% for a stacked two-year increase of 86%. We are improving our execution but see many remaining opportunities for growth in furniture and mattress sales. 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 January 31, 2013, up approximately 700 basis points from the prior-year period. The year-over-year increase in retail gross margin was driven primarily by the 54.1% increase in higher-margin furniture and mattress sales, as well as a favorable shift in mix to higher-margin offerings within each of the product categories.
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 January 31,||Same store|
|2013||% of Total||2012||% of Total||Change||% Change||% change|
|(dollars in millions)|
|Furniture and mattress||39.9||19.1||25.9||13.6||14.0||54.1||40.2|
|Total product sales||189.8||91.1||173.5||91.5||16.3||9.4||5.9|
|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|
|End of period||68||65|
- 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.
The Company will host a conference call and audio webcast on Wednesday, April 3, 2013, at 10:00 A.M. CT, to discuss its financial results and operating performance for the quarter. The webcast will be available live at ir.Conns.com and will be archived for one year. Participants can join the call by dialing 877-754-5302 or 678-894-3020.About Conn’s, Inc. Conn’s is a specialty retailer currently operating 68 retail locations in Texas, Louisiana, Oklahoma, New Mexico and Arizona. The Company’s primary product categories include:
- 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.