Specialty retailer Conn’s reported both higher revenue and income during the period, in addition to an 11.7 percent comp increase, and noted it was pleased with its fiscal fourth quarter comp-sales performance,
Conn’s, which sells consumer electronics; major appliances; and home office, bedding, lawn and garden products, reported revenue for the three months, ended Jan. 31, of $144 million, a 19.4 percent rise over the $120.6 million recorded in the year-ago period.
Net income in the fourth quarter hit $8.4 million, compared with $6.1 million in the same three months last year.
During the fourth quarter, Conn’s continued its expansion into the Dallas/Fort Worth market, opening one additional store in November, bringing total store count there to three by Jan. 31. Two additional locations were opened in February and April. In the current fiscal year, additional sites are being developed in this market, with three to five additional locations and a new distribution center expected by Jan. 31, 2005. Eventually, Dallas/Fort Worth could account for upward of 20 stores, chairman/CEO Tom Frank said during a conference call.
Asked by an analyst why the new Dallas units are meeting or exceeding plan, while Ultimate Electronics’ entries there have faltered, Frank pointed to his stores’ “first-class locations” near freeway exchanges that are within several miles of 60,000 to 90,000 rooftops.
The chain currently operates 47 units in Texas and Louisiana, with the total expected to climb to 50 to 52 stores by the end of next January.
For the 12 months, revenue increased 12 percent, reaching $499.3 million, up from $446 million the previous year. Same-store sale edged upward 2.6 percent, while net income hit $24.3 million, compared with $20.6 million a year earlier.
In the first fiscal quarter of the current year, ending April 30, Conn’s expects comp-store sales to reach the low to mid-single-digit range.
On the product front, Frank said that new flat-panel display technologies are providing new selling opportunities, but their falling prices are making older technologies obsolete. Demand for older TV types should pick up this summer, however, after a Federal Communications Commission mandate for more integrated sets raises HDTV price points by about $300, he said. He added that Conn’s has shipment guarantees for advanced technology TVs with two video vendors that include penalties for shortfalls in order to avoid last year’s fourth quarter run on micro display sets.
In major appliances, Frank said that new, lower-priced yet high-efficiency refrigerators and laundry products “are creating a lot of excitement out there, and we like the results.” — Additional reporting by Alan Wolf