Conn’s, Inc., 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, 2009.
Net sales for the quarter ended July 31, 2009, of $190.3 million, decreased $0.3 million, or 0.2%, as compared with the quarter ended July 31, 2008. Net sales represent total product sales, service maintenance agreement commissions and service revenues. Same store sales (sales recorded in stores operated for the entirety of both periods) decreased 5.2% for the quarter ended July 31, 2009. Though same store sales were impacted by increasingly challenging economic conditions during the quarter, the Company believes it increased its consumer electronics and home appliance market share, as retail sales for appliance and electronics stores declined approximately 12% nationally during the quarter ended June 30, 2009, as reported in U.S. Census Bureau News – Advance Monthly Sales for Retail Trade and Food Services. The expected market share gains are evidenced by the increase in total television unit sales of 28.0% and increase in total appliance sales, as compared to the same period in the prior year. 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 27, 2009.
The following is a summary of the key items impacting net sales during the quarter:
• The consumer electronics category sales declined despite continued growth in unit sales of flat-panel televisions, led by LCD and plasma televisions, offset by declines in average selling prices and projection television unit sales.
• The home appliance category sales grew during the quarter, though the appliance market in general showed continued weakness, as increased sales of air conditioners and refrigerators offset declines in laundry and cooking.
• The track sales decline was largely due to lower desktop computer, camcorder and video game equipment sales, partially offset by higher DVD player and laptop computer sales and the addition of netbooks.
• The increase in furniture and mattresses sales was driven by expanded brand offerings and improved in-store displays. Furniture accounted for $18,323,000 worth of sales (9.6% of total sales), an increasd of 10.7% over 2008.
• The decrease in other product sales was due primarily to lower lawn and garden equipment sales as drought conditions continued in many of the Company’s markets, in addition to reduced delivery revenues as customers take advantage of the ability to carry out smaller flat-panel televisions.
• The service maintenance agreement commissions decreased due to reduced emphasis on this product while the Company completed a thorough review of the program offered to consumers and the training of its sales associates, in response to the Texas Attorney General’s investigation. The Company expects sales in this area to trend towards its historical performance levels over time due to the enhancements made as a result of the review.
• Seven stores opened since May 1, 2008, reduced by the closure of the San Antonio clearance center, partially offset the decrease in Total net sales.
Net sales for the six months ended July 31, 2009, of $390.4 million, increased $4.7 million, or 1.2%, as compared with the six months ended July 31, 2008. Net sales represent total product sales, service maintenance agreement commissions and service revenues. Same store sales (sales recorded in stores operated for the entirety of both periods) decreased 4.9% for the six months ended July 31, 2009.
About Conn’s, Inc. The Company is a specialty retailer currently operating 75 retail locations in Texas, Louisiana and Oklahoma: with 23 stores in the Houston area, 19 in the Dallas/Fort Worth Metroplex, nine in San Antonio, five in Austin, five in Southeast Texas, one in Corpus Christi, four in South Texas, six in Louisiana and three in Oklahoma. It sells home appliances, including refrigerators, freezers, washers, dryers, dishwashers and ranges, and a variety of consumer electronics, including LCD, LED, plasma and DLP televisions, camcorders, digital cameras, computers and computer accessories, Blu-ray and DVD players, video game equipment, portable audio, MP3 players, GPS devices and home theater products. The Company also sells lawn and garden products, furniture and mattresses, and continues to introduce additional product categories for the home to help respond to its customers' product needs and to increase same store sales. Unlike many of its competitors, the Company provides flexible in-house credit options for its customers. In the last three years, the Company financed, on average, approximately 61% of its retail sales.