Conn's Q2 Earnings Up 13%
By Alan Wolf -- TWICE, 9/3/2007
BEAUMONT, TEXAS — Strong flat-panel TV sales and improved credit portfolio performance helped Conn's grow net earnings 13 percent to $9.7 million for its second fiscal quarter, ended July 31.
Total revenues for the three months increased 11.7 percent to $203.5 million, including a 9.4 percent gain in net sales of $15.4 million and a 32.1 percent increase in finance charges of $5.9 million.
Same-store sales grew 5 percent for the quarter and 8 percent in August, aided by brisk sales of flat-panel TVs. In fact, the company reported a 90 percent increase in category dollar volume for the period, while LCD TVs were up 124 percent and plasma displays were ahead 150 percent in unit volume for the first half of the company's fiscal year.
In a conference call, vice chairman Bill Nylin said Conn's has not seen any softening of demand for flat panel, which is being fanned by "escalating promotions."
"The price competition has been similar to the holiday season," he told analysts. "Not as crazy, but it's day-in, day-out. Everyone is aggressive, the vendors and the retailers."
Executives said the margin declines are being offset by other, more profitable categories carried by Conn's, including major appliances and furniture.
Conn's, a member of the NATM Buying Corp., currently operates 63 stores in Texas and Louisiana. The chain plans to open 10 to 12 new units over the next 12 months, including its first Oklahoma locations, although recent heavy rainfalls will likely delay some openings.
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