Beaumont, Texas - Conn's reported flat sales and negative revenue
growth in the fiscal second quarter, punctuated by declining same-store sales,
tighter margins and an increase in the company's bad debt reserve.
Total revenues for the CE and home-furnishings specialty
retailer's quarter increased 0.8 percent to $220.2 million, compared with the
same quarter in the prior fiscal year, while total net sales declined 0.2
percent to $190.3 million.
Same-store sales dropped 5.2 percent but were partially offset by
what the company believed to be an increase in market share, as total
television unit sales grew 28 percent, furniture and mattress revenues grew
10.7 percent and total home appliance revenues grew 2.6 percent.
blamed the same-store sales decline on "the increasingly challenging economic
conditions experienced in the company's markets and the decline in average
selling prices on flat-panel televisions."
The company said revenue growth in furniture and mattresses and
appliances was offset by declines in the CE and lawn and garden categories and
service maintenance agreement commissions, the company said.
Adjusted net income for the quarter was $4.9 million, compared
with $11.0 million in the year-ago period.
said growth in its bad debt reserve reduced its profit in Q2. The bad debt
reserve rose to $2.7 million from $300,000 million in the year-ago period. The
company, which provides flexible in-house credit options for its customers, said
it has financed about 61 percent of its retail sales in the last three years.
"While our second-quarter performance did not meet our
expectations, we feel that we gained market share across our core categories.
As economic conditions continue to weigh on consumers, our customers are
searching for value, customer service and financing, all of which are part of
our unique shopping experience," said Conn's
president and CEO Timothy Frank. "For the second half of the year, we are focused
on executing in our stores, growing our market share, maintaining strong credit
quality in our credit portfolio and continuing to invest in the business to
drive growth, while implementing identified cost saving opportunities and
maintaining our focus on cost control."
Conn's currently operates 75 stores
in Louisiana, Oklahoma
and Texas and
has plans to add three to five stores during the current fiscal year, the