Furniture, bedding bolster Conn's earnings

Larry Thomas -- Furniture Today, September 10, 2012

BEAUMONT, Texas - Specialty retailer Conn's said its second quarter sales rose 10.9% as the company reversed a net loss from last year's second quarter.
     The increases were driven by furniture and bedding sales, which leaped 57.5% on a same-store basis and helped boost gross margins by 5.3 percentage points to 34.1%. The company said the category accounted for about 21% of overall sales.
     Total revenues for the quarter ended July 31, which also includes sales of appliances, electronics, lawn and garden equipment, and credit income, were $207.4 million. That compares with $187 million for the same quarter in 2011.
     Same-store sales jumped 21.5%.
     Net income totaled $11.6 million or 35 cents per share. In the same quarter last year, the retailer reported a net loss of $3.1 million or 10 cents per share. That figure included a loss of $11.1 million for early retirement of debt and store closing and relocation costs of $3.7 million.
     Conn's said the improvements in operating performance have continued into the third quarter, and the company boosted its earnings projections for the fiscal year to $1.40 to $1.50 per share. That's up from a June projection of $1.30 to $1.40 per share.
     "Improvements in our retail operating performance continued into August, when we experienced growth in same-store sales of 12%, on top of a 6% increase last year," said Theodore Wright, chairman and CEO.
     For the six months ended July 31, revenues rose 7.7% to $408.3 million.
     Six-month net income was $23.2 million or 70 cents per share. That's up from $1.3 million or 4 cents per share in the first six months of the previous fiscal year.
     Conn's currently has 65 stores in Texas, Louisiana and Oklahoma. The retailer said it expects to open five new stores before the end of the year.