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Conn's Q1 Comps Climb 18%

5/08/2012 10:00:36 AM Eastern

Beaumont, Texas - Conn's is on a roll.

The multiregional appliance, furniture and
CE chain reported a 6.2 percent increase in first-quarter sales, to $166.9
million, and a 17.8 percent gain in comp-store sales for the three months,
ended April 30.

The solid results follow a nearly 4 percent
net sales gain and 12.1 percent comp increase during the preceding quarter.

The once struggling business attributed its
first-quarter performance to higher average selling prices (ASPs), an improved
and expanded furniture and mattress assortment, and the partial contribution
from 11 stores that were closed last year.

"We achieved 17.8 percent same-store sales
growth despite continued weakness in TV sales," observed chairman/CEO Theo Wright.
"Our retail operations delivered gross margins above our annual guidance driven
by a favorable shift in product mix during the quarter."

Retail gross margin, which includes gross
profit from both product and service agreement sales and a 150 basis-point
contribution from vendor marketing support, was approximately 33.5 percent for
the period, compared with 30.5 percent for the year-ago quarter.

Broken out by category, CE comp sales
slipped 0.2 percent due to the store closures, and electronics now comprise
31.4 percent of the sales mix, down from 37 percent last year. Declines in
gaming hardware and accessories were offset by gains in TV and home theater, as
TV ASPs rose 27.4 percent amid a 21 percent decline in unit volume.

Majap comps grew 16.7 percent thanks to a
28.7 percent increase in ASPs, which partially offset a nearly 16 percent drop
in unit volume due in large measure to the store closures. Laundry sales were
up 20 percent, refrigeration sales were up 15.9 percent and cooking sales were
up 32.1 percent, while room air sales fell nearly 30 percent due to cooler
weather. Majaps represent 29 percent of Conn's sales mix, essentially unchanged
from last year.

Home-office comps increased 20 percent
thanks to increased tablet sales and a 25 percent spike in laptop and desktop
ASPs, which helped offset lower unit volume in computers, decreased accessories
sales, and the impact of the store closures. The category now comprises 7.3
percent of the sales mix, up from 7 percent last year.

Comps for furniture and mattresses rocketed
43.1 percent thanks to enhanced displays, a broader selection, and increased
promotions. The category now represents 17 percent of the sales mix, up from 14
percent last year.

Extended-service contract comps increased
37 percent and now comprise 6.8 percent of the sales mix, up from 5.7 percent
last year, although service revenues declined 11.8 percent to $3.4 million and
slipped from 2.5 percent to 2.1 percent of Conn's mix.

The company, which currently operates 65
stores in Louisiana, Oklahoma and Texas, will report its full first-quarter
results on June 4.

 

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