Beaumont, Tex. - Conn's reported a 15.3 percent drop in net sales for its fiscal third quarter ended Oct. 31.
Net sales for the quarter were $136.7 million down $24.7 million from the prior year's quarter.
Conn's will report its earnings and operating performance for the quarter on Dec. 2 in a conference call.
Same store sales (sales recorded in stores operated for the entirety of both periods) decreased 16.4 percent in the quarter compared with the prior year.
Conn's blamed the decrease on current economic conditions, limitations imposed by the retailer's current capital structure and the resulting impact on its ability to extend credit, its decision to tighten credit underwriting requirements to protect the quality of the credit portfolio, and management's emphasis on improving retail gross margin while maintaining price competitiveness.
By category consumer electronics sales (see chart) declined as a result of a 13.0 percent drop in the average selling price of flat-panel televisions and a 14.4 percent decrease in unit sales as lower LCD unit sales offset increased sales of LED and plasma televisions
Home appliance category sales declined during the quarter on lower unit sales and a decline in the average selling price, though room air conditioning sales increased during the quarter.
Track sales declined slightly as increased sales of accessories, MP3 players and compact stereos were offset primarily by declines in the sales of camcorders, digital cameras, GPS devices, computer equipment and video game hardware.
The growth in furniture and mattresses sales was driven by the addition of in-store specialists focused on this category, improved in-store displays and expanded product selection.
The decrease in other product sales resulted largely from declines in lawn and garden sales and delivery revenues.
The decline in repair service agreement commissions was driven largely by the decline in product sales and increased cancellations of these agreements as a result of higher credit charge-offs.
Service revenues decreased as the Company increased its use of third-party servicers during the quarter to provide cost-effective, timely product repairs for its customers.
Sales from two stores opened since August 1, 2009, reduced by the closure of the Baytown, Texas clearance center, partially offset the decrease in Total net sales.
Net sales for the nine months ended October 31, 2010, were $478.6 million, a decrease of $73.2 million, or 13.2 percent, as compared with the nine months ended October 31, 2009. Same store sales decreased 14.2 percent for the nine months ended October 31, 2010, as compared to the same period in the prior year.