Strong TV Sales In Jan. Boost Retail Revenue

By Alan Wolf -- TWICE, 2/9/2009

NEW YORK — Strong TV sales helped retailers regain their footing in January as a temporary glut of flat-panel inventory led to opportunistic buys and compelling Super Bowl sales events.

Within the specialty channel, Conn's, the 76-store CE and appliance chain, said comp-store sales rose 21.7 percent in January and 12.5 percent for its fiscal fourth quarter, ended Jan. 31. Net sales rose 22.3 percent to $245.4 million for the three-month period, driven by the addition of two new stores during the quarter and replacement sales following Hurricane Ike last fall.

Conn's also attributed the comp-sales gains to its “focus on increasing its market share,” which it said it accomplished without sacrificing gross product margins.

Broken out by category, CE revenue grew 43.8 percent to $110 million during the quarter, led by LCD TVs and higher sales of home theaters, with majap sales edging up 2.1 percent to $52.3 million.

The chain also enjoyed higher sales of laptop computers, DVD players, video game equipment and accessories, which were partially offset by lower MP3 player revenue.

Net sales for the full year, ended Jan. 31, rose 10.1 percent to $805 million, reflecting the addition of 12 stores since Nov. 1, 2007, and comp sales increased 2 percent. Earnings will be announced March 26.

Among national discount chains, Wal-Mart said sales at its flagship domestic discount stores grew 6.1 percent to nearly $18 billion in January, and comp-store sales rose 2.1 percent. The company said the stores “met or exceeded expectations” in the entertainment and hard lines categories and continued to outperform the market.

At Target, January sales rose just less than 1 percent to $4.1 billion and comp sales slipped 3.3 percent. Comp sales increased by the high single digits in CE and declined by the low double digits in the entertainment category.

Within the warehouse club channel, Costco said January sales were flat at $5.1 billion while comp sales at United States stores rose 4 percent, excluding the impact of lower gas prices. Traffic was up 4 percent in January vs. 2.5 percent to 3 percent over the September through November period, and CE and majap sales were flat for the month.

In a conference call announcing substantially lower earnings projections for the second fiscal quarter, chief financial officer Richard Galanti noted that TV sales were up 80 percent in units but only 18 percent in dollars last month due to price declines and opportunistic buys offered by vendors.

At Wal-Mart's Sam's Club unit, January sales slipped nearly 1 percent to $3.1 billion, and comp sales increased 2.4 percent, excluding the impact of gas prices.

At BJ's, net sales rose nearly 1 percent in January to $656.7 million and comp sales increased 7.6 percent, excluding the impact of gas prices. The company included computers among its strongest-performing categories and TVs and prerecorded video among its weakest.

Separately, hhgregg said same-store sales fell 13.2 for the three months, ended Dec. 31. (For the chain's quarterly report see p. 6.)

Barclays Capital retail analyst Michael Lasser said the strong TV sales reported by some retailers reflected aggressive pricing from vendors faced with excess capacity from Circuit City's demise.