The Woodlands, Texas — Conn’s said rising comp-store sales and product margins led to sharply higher earnings and revenue for its second fiscal quarter.
Net income rose 65.1 percent to $19.2 million for the multiregional furniture, appliance and CE chain, while net revenues rose 30.5 percent to $270.7 million for the three months, ended July 31.
Despite the strong results, the quarter came in shy of Wall Street estimates due to declines in Conn’s credit segment and the company’s share price fell in early morning trading.
Within the company’s retail segment, revenues increased 30.3 percent to $224 million, driven in part by new store openings, and comp sales rose 18.4 percent on gains in every product category.
Specifically, furniture and mattress comps increased 33.7 percent; home office comps increased 18.9 percent; majap comps increased 13.3 percent; and CE comps increased 8.2 percent.
Within the latter, TV sales rose 15 percent on same-store unit growth and slightly higher average selling prices (ASPs).
Within majaps, laundry sales were up 26 percent, refrigeration was up 23 percent, cooking category sales rose 20 percent, and total unit volume increased 10 percent.
Within home office, tablet sales soared 52 percent and computer sales increased 20 percent.
Unit sales of furniture rose 47 percent and ASPs were up slightly, while unit sales of mattresses increased 38 percent and ASPs rose 11 percent. Together the two categories contributed 24.9 percent of total product revenue and generated 35.3 percent of total product gross profit, although margins expanded in all product categories.
Total retail gross margin increased to 38.3 percent from 34.1 percent in the prior-year period.
Looking at the current quarter, chairman/CEO Theo Wright said net sales rose 51 percent and comp sales increased 31 percent in August.
Conn’s is projecting full-year comp gains of 15 to 20 percent for the 12 months, ended Jan. 31, 2014, and plans to have opened between 10 and 12 new stores.
Wright added that the company’s first three Phoenix-area stores are “successful” and that the chain is planning to open four more locations within that market over the next several quarters.