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Conn's Q1 Sales Slip 4%

5/10/2011 11:34:41 AM Eastern

Beaumont, Texas - Conn's
said net retail segment sales declined 3.9 percent to $157.2 million during its
first fiscal quarter ended April 30.

Comparable store sales,
excluding five locations that are being shut and two that are coming off lease
this year, also decreased 3.9 percent. Conn's closed one store during the
quarter, in Austin, Texas, when its lease expired last month.

Gross margin, including
gross profit from sales of products and service agreements, rose in most
categories to hit 28 percent for the 75-store CE, appliance and furniture chain,
up from 23.9 percent during the year-ago period.

Broken out by category,
CE sales declined 4.5 percent during the quarter, largely on a 20.5-percent
decline in the average selling price (ASP) of TVs, even as unit sales increased
19.4 percent on a 128.8 percent spike in unit sales of plasma displays. Weaker
camera and camcorder sales also contributed to the decline, which was partially
offset by higher sales of video game hardware, MP3 players and accessories, and
the addition of DJ systems to the assortment.

Within home office, sales
declined 19.2 percent primarily as a result of a 15.9-percent drop in unit
sales of laptop and desktop computers, and a 3.8 percent decrease in ASPs. Nevertheless,
Conn's said it drove an increase in the amount of gross profit generated by
this category.

Sales of major appliances
fell 7.5 percent on lower unit sales and ASPs, with laundry segment sales down
11.2 percent, refrigeration down 6.7 percent, and cooking down 17.7 percent. In
contrast, room air sales soared 96.4 percent during the quarter.

Service revenues
decreased 18.2 percent as the company increased its use of third-party
servicers during the quarter "to provide timely product repairs for its
customers," Conn's said. Commission from service agreements declined 8.6
percent.

In terms of mix, CE
represented 36.3 percent of total sales, majaps 28.7 percent, home office 6.7
percent and repair services 8.2 percent during the quarter, with the balance comprised
of furniture, mattresses and lawn and garden equipment.

The company will report
its full first-quarter results on May 25.

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