Conn's Q3 Sales Fall, Chains' Oct. Sales Rise

By Alan Wolf -- TWICE, 11/5/2009

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Beaumont, Texas - Conn's said a weak local economy hurt sales during its fiscal third quarter, while national discount chains posted modest improvements in October.

Net sales at Conn's fell 7.2 percent to $161.4 million for the three months, ended Oct. 31, while comp-store sales declined 9.3 percent.

The multiregional CE, appliance and furniture chain attributed the declines to challenging economic conditions within its trading areas, and difficult year-over-year comparisons that reflect a surge in post-hurricane replacement sales in 2008.

Specifically, unit growth in flat-panel TV, led by gains in LCD and plasma, were offset by declines in both average selling prices and sales of rear projection models during the quarter. Sales of major appliances also continued to decline, with the majap sales mix falling 10 percent to less than 30 percent of total sales.

Warranty attachments also declined as Conn's monitored its sales practices in response to an investigation by the Texas attorney general.

Growth in notebook and netbook computers was offset by declines in other small CE and appliance products, the company said.

Results were rosier for national discount chains in October. Among those reporting, Target said net sales were up 2.8 percent to $4.5 billion, although weak CE sales and fewer overall transactions kept same-store sales flat. In a statement, chairman/CEO Gregg Steinhafel said the company is entering the holiday season with clean inventories and is "positioned to perform well in what continues to be a challenging economic environment."

Costco said net sales rose 7 percent to $5.7 billion in October, while U.S. comp-store sales rose 3 percent, excluding the negative impact of lower gas prices. Comp sales for the chains' combined CE and appliance business rose by the mid-single digits, reflecting gains in cameras, PCs, audio equipment and TVs. The latter enjoyed a 25 percent spike in unit sales but only "slightly positive" comps due to continued price deflation, Costco said.

At BJ's Wholesale Club, net October sales rose 3.5 percent to $764.7 million and same-store sales slipped 1.1 percent excluding fuel. TVs and computers were among the strongest monthly performers, while video games and DVDs were among the weakest.