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Conn's Posts Q4 Loss, Higher Sales

3/31/2011 09:47:38 AM Eastern

Beaumont, Texas -
Conn's reported higher revenues, but a net loss for its fiscal fourth quarter,
ended Jan. 31.

Total revenues
were $213.4 million, up 2.9 percent from the same period in the prior fiscal
year. The net loss was $3.4 million compared with the prior year's net profit of
$1.7 million.

Same-store sales increased
5.2 percent during the fourth quarter, as compared with a 31.7 percent decrease
in the same quarter in the prior fiscal year. Conn's said the increase in sales
during the quarter was driven largely by growth in the CE, furniture and mattresses
categories. Due to lower-than-expected sales, Conn's has decided to exit
certain product lines in its track category and, as a result, has recorded an
inventory charge of $1.7 million related to these slow-moving, aged products.

Retail segment
loss before income taxes was $700,000 for the quarter, as compared with a loss
of $1.4 million for the same quarter in the prior fiscal year. The current
quarter loss included a long-lived asset impairment charge of $2.3 million, as
a result of the planned closure of five store locations and the previously
mentioned $1.7 million inventory write-down.

Retail gross
margin decreased to 22.8 percent for the quarter, as compared with 23.5 percent
for the same period in the prior fiscal year.

Credit segment
loss before income taxes was $3.5 million for the quarter, as compared with
income of $2.1 million for the same quarter in the prior fiscal year.

Additionally, Conn's
recently completed a strategic review of its store locations, and is completing
plans to close five underperforming locations and allow the leases to expire on
two additional locations that are not performing up to its expectations, the
chain said. Conn's will close during fiscal year 2012 two stores in Austin, one
store in San Antonio, and four stores in Dallas, Texas.

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