The Woodlands, Texas – Conn’s reported third-quarter profits of $11.8 million, compared to a year-ago loss of $12.7 million.
Total revenues rose 10.6 percent to 206.4 million, retail revenues increased 8.2 percent to $167.7 million, and comparable store sales climbed 12.6 percent for the three months ended Oct. 31.
Contributing to the strong results was a 31.7-percent increase in furniture and mattress sales and higher customer demand for home office products and majaps, the company said.
The multi-regional appliance, furniture and CE chain also cited the opening of a Conn’s HomePlus store in Waco, Texas in mid-June and the completion of 15 store remodels over the past year.
Retail operating income was $11.6 million, compared to a year-ago loss of $8.6 million, and retail gross margin was 35.5 percent, up from 25.3 percent during the prior-year period. The margin gain was driven by a focus on higher price-point, higher-margin products and sourcing opportunities, and growth in the high-margin furniture and mattress category that outpaced the overall increase in the chain’s other product sectors.
Chairman/CEO Theo Wright, who has led the company’s dramatic turnaround, noted that November comp sales rose 6 percent; that Conn’s first New Mexico store has performed well since its opening last month; and that the chain is adding three more locations this week for a total of 69, and will open between 10 and 12 new stores next year.
In other Conn’s news, credit division president Rey de la Fuente will step down on Jan. 31, the end of the current fiscal year, to pursue other opportunities after 14 years with the company.
Conn’s is also building its war chest by adding another lender to its loan facility, which increased its credit line by $20 million to $545 million, and by initiating a public offering of 3,591,621 shares of common stock by certain selling stockholders and 1,408,379 shares of common stock by the company. The chain will also grant the underwriters a 30-day option to purchase up to approximately 750,000 shares of common stock from the company to cover over-allotments, if any.