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Conn’s Q1 Comps Fall 20%

Texas – Conn’s,
the multiregional electronics, appliance and furniture chain, said a weak
local economy and tightened consumer credit lead to a 19.8 percent drop in
comp-stores sales during its fiscal first quarter, ended April 30.

Net sales,
excluding revenue from the company’s in-house finance operation, fell 18.6
percent to $162.8 million during the period.

The downturn was
led by a 23.3 percent decline in unit sales of flat-panel TVs and a 12.2 percent
decline in average selling prices, chiefly for LCDs.

The company also
reported a 16 percent decline in majap sales, reflecting lower unit volume in
all appliance categories despite the benefit of the Energy Star rebate program
that was launched in Texas
last month.

Sales within the
stores’ central “track” section slipped 1.1 percent as increased sales of
laptop and desktop computers, the introduction of netbooks, and higher digital
camera and accessory sales were offset by declining sales of camcorders, GPS
devices and video game hardware, the company said.

Despite the
downturn, sales trends successively improved during each month of the quarter,
and retail gross margin rose to approximately 27 percent for the three months, compared
with 23.7 percent during the preceding quarter and 25 percent during the
year-ago period, as management focuses on profitability while maintaining price
competitiveness, Conn’s said.

The company also
reported rising average selling prices in appliances.

The net sales
decline was partially offset by the opening of two new stores last year,
although the gains were offset by the closure of a clearance center. The NATM
retailer currently operates 76 stores in Texas,
Louisiana and Oklahoma.

Conn’s will report its full first-quarter
results on May 27.