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Conn's Posts Loss in Q3; Wright Is CEO

12/19/2011 12:01:00 AM Eastern

BEAUMONT, TEXAS – Conn’s reported
a $12.7 million loss for its fiscal third
quarter and appointed chairman Theodore
Wright president/CEO.

The multiregional CE, majap and furniture
retailer said the loss stemmed from
$19.2 million in pretax charges, including
$400,000 for store closures, $4.7
million in write-offs of ageing inventory,
and $14.1 million after new accounting
procedures were adopted following a
troubled debt restructuring.

The company lost $4.8 million during
the year-ago quarter.

Total revenue rose 5.2 percent for the
three months, ended Oct. 31, to $179.5
million. Retail revenue increased 12.3
percent to $155 million and same-store
sales soared 28.2 percent. Excluding
the pretax charges, the retail segment’s
adjusted operating loss was $800,000,
down from $3.5 million for the year-ago
quarter, as adjusted gross margin rose
to 28.2 percent from 25.8 percent last
year on improved gross margins in home
office and furniture, higher service attachment
rates, and increased sales of
higher-margin furniture and mattresses.

“I am encouraged by our sales performance,
as we returned to positive
same-store sales during the quarter,” said
Wright, who had served as acting president/
CEO since February. “The improvements
in our retail operating performance
carried over into the month of November,
when we experienced a same-store sales
increase of 10.5 percent.”

Driving the retail gains were increases
of 11.6 percent in product sales, 28.1
percent in service contract commissions
and 4.8 percent in service repairs.

Product sales benefitted from higher average
selling prices (ASPs) in all major categories
and increased unit sales of furniture,
mattresses, major appliances and CE.

Looking ahead, the company anticipates
same-store sales will be up by the
low to mid-single digits for the full fiscal
year ending Jan. 31, 2012, and that between
five and seven new locations will
have been opened in new markets.

Conn’s currently operates 70 stores in
Texas, Louisiana and Oklahoma, and finances
about 60 percent of its retail sales
through its in-house credit operation.

Wright, a former president of Sonic
Automotive, a multi-state car dealership,
has served as Conn’s interim president/
CEO since February, succeeding Tim
Frank. He joined the board in 2003, was
elected chairman in 2010, and sat on
the company’s audit and compensation
committees until last February.