Conn's Reports Flat Q2 Sales
By Alan Wolf -- TWICE, 8/6/2009
Beaumont, Texas - Conn's, the multiregional CE, appliance and furniture chain, reported essentially flat sales for its second fiscal quarter, ended July 31.
Net sales slipped 0.2 percent to $190.3 million for the period, while comp-store sales fell 5.2 percent.
Brisk sales of flat-panel TVs and modest gains in major appliances helped offset declines in extended warranties, camcorders, desktop computers, gaming and other categories, the company said.
Comp-store sales were impacted by the "increasingly challenging economic conditions" during the quarter, Conn's said, but believes it grew its CE and majap share based on U.S. Census Bureau data showing a 12 percent sales decline for brown- and white-goods retailers nationwide during the three months, ended June 30.
Broken out by category:
CE sales, which comprised about 32 percent of total revenue, declined 4.2 percent during Conn's second fiscal quarter despite a 28 percent spike in unit sales of TVs. The growth was led by LCD and plasma models but was offset by declines in average selling prices and unit sales of rear-projection TVs.
Majap sales, which comprised about 33 percent of total revenue, grew 2.6 percent during the quarter, although the overall appliance market showed continued weakness, with increased sales of air conditioners and refrigerators offset by declines in laundry and cooking.
Sales within the stores' central "track" area, which comprised about 12 percent of total revenue, were essentially flat as lower sales of desktop PCs, camcorders and video game hardware were partially offset by higher sales of DVD players and laptop and netbook computers.
Sales of extended-service plans (ESPs), which comprised about 5 percent of total revenue, fell 10.6 percent as Conn's de-emphasized the category while completing a thorough review of its extended warranty offerings and sales practices, in response to an investigation by the Texas Attorney General. Conn's expects sales of ESPs to trend back to historical performance levels over time due to "enhancements" made as a result of the review.
Net sales were also buoyed by a 10.3 percent gain in service revenues, representing about 3 percent of total sales, and by the opening of seven news stores since May 2008, which was offset by the closure of a clearance center in San Antonio.
Conn's will report its full second-quarter earnings on Aug. 27.
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