Conn's Sales Rise 11.7% In Fiscal Q1
By Jeff Malester -- TWICE, 6/21/2004
Beaumont, Texas — Fulfilling its effort to increase sales figures without resorting to profit-sapping promotions, specialty retailer Conn's posted an 11.7 percent jump in total revenue for its fiscal first quarter, hitting $134.9 million, up from $120.8 million in the same three months last year. Same-store sales climbed 3.5 percent.
The revenue increase for the first quarter included a net sales rise of 11.1 percent to $118.5 million from the previous year's $106.7 million, and a 15.8 percent upward swing in finance charges to $16.3 million from $14.1 million.
Net income soared 65 percent in the first quarter, reaching $7.8 million, up from $5.1 million in the year-ago period.
"Our strong performance in this first quarter demonstrated our ability to drive sales without the need to over-utilize low margin promotional programs as we did last year," said Thomas Frank, chairman/CEO.
Conn's gross margin percentage in the first three months, ended April 30, moved up to 36.3 percent from 35.2 percent year-over-year.
"Our gross margin reflects the improvements that were made in how we approached our grand opening celebration this year and demonstrated that we could manage the sales discount function in a more appropriate manner," continued Frank.
Conn's placed much emphasis on "track sales" during the three months, relying on the movement of smaller electronics and appliance items, as well as other "carry out" products that were sold inside a track area located within the interior of each store.
In a conference call, Frank said CE revenue rose 9.6 percent and majap sales grew 5.5 for the quarter. On the product front, he said he has high expectations for the microdisplay TV category, which "creates excitement and raises price points." He cautioned that shortages "could be an issue" for the category, although "our vendors tell us that there should be enough availability if we forecast properly."
During the quarter, the retailer of major appliances, consumer electronics, home office products and bedding and lawn and garden products, continued to enhance its presence in the Dallas/Fort Worth metroplex, with the opening of two additional locations in February and April.
Conn's, which currently operates 47 stores in Texas and Louisiana, now has five locations in Dallas/Fort Worth. It said it expects to develop additional sales in this market, and others, and projects the opening of two or three new stores in the last two quarters of the current fiscal year, ending in January of 2005.
Looking ahead, Frank said that "depending on the heat," he anticipates mid-single digit comp store gains for the current quarter, based ostensibly on the contribution of seasonal room air and refrigeration sales.—Additional reporting by Alan Wolf
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