Conns, Inc. Reports Net Sales Results for the Quarter Ended July 31, 2010
Business Wire, August 05, 2010
BEAUMONT, Texas — Conns, Inc. (NASDAQ/NM: CONN), a specialty retailer of consumer
electronics, home appliances, furniture, mattresses, computers and lawn
and garden products, today announced its net sales results for the
quarter ended July 31, 2010.
Net sales for the quarter ended July 31, 2010, of $178.7 million,
decreased $11.6 million, or 6.1%, as compared to the quarter ended July
31, 2009. Net sales represent total product sales, repair service
agreement commissions and service revenues. Same store sales (sales
recorded in stores operated for the entirety of both periods) decreased
6.5% for the quarter ended July 31, 2010. The same store sales trend,
which improved each month of the quarter, with positive same store sales
in July, was impacted by:
-
more challenging economic conditions in the Companys markets during
the quarter, as compared to the same quarter in the prior year, and
-
managements emphasis on improving retail gross margin while
maintaining price competitiveness.
The Company improved its retail gross margin, which includes gross
profit from both product and repair service agreement sales, to
approximately 25% for the quarter ended July 31, 2010, as compared to
the 23.6% experienced in the quarter ended July 31, 2009. Total revenues
for the quarter, including revenues from finance charges and other, will
be reported in the Company’s earnings release and conference call
scheduled for August 26, 2010. The following table presents the makeup
and changes in net sales for the quarter:
[Table Omitted]
The following is a summary of the key items impacting net sales during
the quarter, as compared to the same quarter in the prior fiscal year:
-
Consumer electronics category sales declined as a result of a 20.4%
drop in the average selling price of flat-panel televisions, partially
offset by a 10.1% increase in unit sales driven by increased sales of
plasma televisions,
-
Home appliance category sales declined during the quarter on lower
unit sales, primarily in the refrigeration and room air conditioning
categories, though average selling prices increased,
-
Track sales declined slightly as increased sales of accessories, MP3
players and desktop computers were offset primarily by declines in the
sales of camcorders, digital cameras, GPS devices, netbooks, computer
monitors and video game hardware. A 17.2% increase in unit sales of
laptop computers offset a 14.8% decline in the average selling price
of this product.
-
The growth in furniture and mattresses sales was driven by the
addition of in-store specialists focused on this category, improved
in-store displays and expanded product selection,
-
An increase in lawn and garden sales included in other product sales
was largely responsible for the growth in this category,
-
The decline in repair service agreement commissions was driven largely
by increased cancellations of these agreements as a result of higher
credit charge-offs, partially offset by a revenue increase as a result
of higher product unit sales volume,
-
Service revenues decreased as the Company increased its use of
third-party servicers to provide cost-effective, timely product
repairs for its customers, and
-
Sales from two stores opened since May 1, 2009, reduced by the closure
of the Baytown, Texas clearance center, partially offset the decrease
in Total net sales.
I continue to be encouraged by the improving sales trends we have seen
each month this year, said the Companys President and CEO, Tim Frank.
I believe we can continue to deliver improved sales and retail gross
margin performance as we begin to compare against periods that were very
challenging in our markets last year.
Net sales for the six months ended July 31, 2010, were $341.7 million, a
decrease of $48.8 million, or 12.5%, as compared with the six months
ended July 31, 2009. Same store sales decreased 13.3% for the six months
ended July 31, 2010.
The Company will host a conference call and audio webcast on Thursday,
August 26, 2010, at 10:00AM, CDT, to fully discuss its earnings and
operating performance for the quarter. The webcast will be available
live at www.conns.com
and will be archived for one year
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