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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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