Conn's: Hurricanes Blew Away Its Q3 Profits
By Alan Wolf -- TWICE, 12/15/2008
BEAUMONT, TEXAS — Conn's said sales and earnings were socked by Hurricanes Gustav and Ike during the retailer's fiscal third quarter.
Net sales edged up 2.3 percent to $173.9 million during the three months, ended Oct. 31, and revenue from finance charges and other sources rose 9.7 percent to $25.6 million.
But higher storm-related expenses and credit portfolio charge-offs led to a net loss of $7.7 million for the period, and same-store sales sank 5.8 percent due to the loss of 144 store days as the hurricanes ripped through the chain's trading areas.
Chairman/CEO Tom Frank is optimistic about the current quarter based on Texas' relatively low unemployment rate, brisk sales and store traffic, and strong demand for LCD TVs. Indeed, LCD volume was up 63 percent in units and 69 percent in dollars during the third quarter, and demand will only increase over the holidays, he said during a conference call.
Other strong third-quarter performers included laptop PCs, DVD and Blu-ray Disc players, and GPS devices, he noted.
While demand for major appliances remained soft, the company enjoyed a 9.6 percent surge in white-goods sales in October due to post-hurricane replacement purchases.
Frank said thanks to program purchases through the NATM buying group and special buys from vendors, Conn's will continue to price its products to achieve both market share growth and profitability.
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