Conn's Q3 Sales Rise 12.4%

Alan Wolf -- TWICE, 11/8/2011

Beaumont, Texas - Higher retail prices and increased advertising and sales staff helped Conn's revenue rise 12.4 percent to $17.1 million for its fiscal third quarter, ended Oct. 31.

The multiregional CE, majap and furniture chain also attributed the gains to an improved and expanded furniture and mattress assortment and the positive impact on same-store sales of six store closures this year.

Retail gross margin, which includes gross profit from sales of products and extended service agreements, was about 28.5 percent for the quarter, up from 25.8 percent for the year-ago period, due to a shift in the sales mix to higher-margin furniture and mattresses.

"We showed this quarter that we are beginning to gain market share, and did so while maintaining retail gross margins within our forecasted range," said Conn's chairman Theodore Wright.

Broken out by category, comp-store sales of CE rose 8.1 percent thanks to a 1.9 percent increase in TV unit volume and a 3 percent increase in TV average selling prices (ASPs). Home-theater comps also improved, but both were partially offset by declines in camcorders, GPS devices and gaming hardware.

Majap comps soared 16.5 percent on a 3.1 percent increase in unit volume and a 9 percent increase in ASPs. By category, laundry sales increased 14.4 percent, refrigeration was up 20.1 percent, room air rose 7 percent and cooking sales fell 2.7 percent.

In contrast, home office comps declined 1.9 percent due to a 20.1 percent drop in unit volume of laptops, netbooks and desktop computers.

Service contract commissions rose 32 percent, and furniture and mattress comps skyrocketed nearly 69 percent year over year thanks to enhanced displays, improved product selection and increased promotional activity. Unit volume rose nearly 41 percent and ASPs increased 14 percent for the period.

The 70-store NATM dealer will announce its third-quarter earnings on Dec. 8.