Conns Inc. (CONN) Sales Down 30.3% for January 2010
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Conn’s, Inc. (NASDAQ: CONN) today announced its net sales results for the quarter ended January 31, 2010.
Net sales for the quarter ended January 31, 2010, of $171.0 million, decreased $74.5 million, or 30.3%, after achieving a 22.3% increase in the same quarter of the prior fiscal year. 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 31.7% for the quarter ended January 31, 2010, compared to a 12.5% increase in same store sales in the fourth quarter of the prior fiscal year. The sales comparisons were impacted by:
The following is a summary of the key items impacting net sales during the quarter:
Net sales for the quarter ended January 31, 2010, of $171.0 million, decreased $74.5 million, or 30.3%, after achieving a 22.3% increase in the same quarter of the prior fiscal year. 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 31.7% for the quarter ended January 31, 2010, compared to a 12.5% increase in same store sales in the fourth quarter of the prior fiscal year. The sales comparisons were impacted by:
- more challenging economic conditions in the Company’s markets during the quarter, as compared to the same quarter in the prior year,
- the benefit achieved during the fourth quarter of the prior fiscal year as a result of the decline in performance of Circuit City,
- tightened credit underwriting standards implemented by the Company since the quarter ended January 31, 2009, and
- the sales benefit experienced in the fourth quarter of the prior fiscal year, as a result of the impact of the hurricanes in September 2008.
The following is a summary of the key items impacting net sales during the quarter:
- The consumer electronics category sales declined as a result of an 18.7% drop in unit sales of flat-panel televisions, compared to a 43.6% increase in unit sales in the fourth quarter of the prior fiscal year, and declines in average selling prices. The unit sales decline was impacted by the timing of the Super Bowl, which occurred on February 1st last year and benefited television sales in the quarter ended January 31, 2009,
- The home appliance category sales declined during the quarter on lower unit sales in all appliance categories, though average selling prices increased slightly,
- Track sales declined despite increased unit sales of laptop and desktop computers and the introduction of netbooks, which were offset by declines in the average selling prices of computers and declines in sales of other small electronic and appliance products,
- The decline in furniture and mattresses sales, compared to the 28.5% increase in the same quarter of the prior fiscal year, was driven by the slower economic conditions in the Company’s markets,
The decrease in other product sales was due primarily to lower deliveries, consistent with the declines in the product categories,
- The decline in repair service agreement commissions was driven largely by the decline in product sales. Additionally, increased cancellations of these agreements as a result of higher credit charge-offs reduced repair service agreement commissions, and
- Sales from four stores opened since November 1, 2008, including its new Pasadena, Texas, store opened in November 2009, reduced by the closures of the San Antonio and Baytown, Texas, clearance centers, partially offset the decrease in Total net sales.
- The decline in repair service agreement commissions was driven largely by the decline in product sales. Additionally, increased cancellations of these agreements as a result of higher credit charge-offs reduced repair service agreement commissions, and
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