The momentum from Conn’s mixed first-quarter results carried into May.
According to the company’s monthly performance update — a practice it ended with the May report — net retail sales edged up 0.8 percent, comp-store sales fell 7.6 percent, and greater-than-60-day delinquencies on customer credit balances jumped to 8.9 percent from 8.6 percent in April and 8.5 percent last year.
Chairman, president and CEO Norm Miller, who was brought in last year to right predecessor Theo Wright’s ship, attributed the weak sales to a late Memorial Day; tighter underwriting, which reduces risk to Conn’s in-house credit operation but limits customers’ spending power; and last year’s exit from the video gaming and digital imaging categories, and the dropping of select tablets.
Indeed, home-office comps declined 5.5 percent last month, while CE comps fell 15.6 percent, due partly to tamer TV promotions from vendors prior to Memorial Day, Miller said.
But comps were also down in the retailer’s core furniture/mattress and appliance categories. The former fell 3.2 percent despite increased advertising, and majaps declined 8 percent.
To help turn things around, Miller has brought in a new finance team, led by equity investor Lee Wright as chief financial officer; Mark Priorl as general counsel and corporate secretary; and John Davis as chief credit officer.
In addition, executive VP/COO Michael Poppe was promoted to president/COO of credit and collections, reflecting “the company’s desire to focus his efforts on its critical credit and collections business,” Miller said.
Conn’s, now numbering some 108 stores, has undergone a period of rapid expansion in recent years that has taken the Texas-based chain as far west as Colorado and as far east at the Carolinas.
The company plans to open 10 to 12 stores during its current fiscal year, ended Jan. 31, and is projecting full-year comp declines in the mid- to low-single digits.
