Conn’s Beats Expectation As It Begins Fiscal Year

For the company’s fiscal 2015 first quarter ended April 30, Conn’s, Inc., a specialty retailer of furniture, mattresses, home appliances and consumer electronics, posted net income of $28.5 million, or 77 cents per diluted share, versus $22.2 million, or 61 cents per diluted share, in the year-earlier period. Comparable store sales grew 15.6%, the company reported.

A Zacks Consensus Estimate of financial analysts called for earnings per diluted share of 73 cents.

Total revenues were $335.4 million for the quarter versus $251.1 million in the year-prior period, which includes finance charges and sales of $277.6 million and $209.4 million in the current versus the prior year quarter, Conn’s maintained.

Adjusted diluted earnings grew 31.1%, to 80 cents per diluted share from 61cents per diluted share in last year’s quarter, the company stated, which accounts for pretax charge of $1.8 million associated with facility closures and lease terminations in the 2015 period.

Conn’s noted that furniture and mattress sales increased 64.7% and constituted approximately one-third of total product revenue in first-quarter fiscal 2015. It also pointed out that the company had entered Denver market for the first time in the quarter with opening of two Conn’s HomePlus stores.

“First quarter results met our expectations with solid performance in both the retail and credit operations,” Theodore Wright, Conn’s chairman and CEO, said in announcing the financial results. “Same store sales rose 16% over the prior year with same store sales growth of 3% in the electronics category. This growth continued into May with same store sales increasing 13%. With the expansion of our product offerings and new store openings, furniture and mattress was our leading product category in the quarter. This favorable shift in product mix contributed to retail gross margin of 41.4% for the period.”

Wright added, “We opened two Conn’s HomePlus stores in Colorado in late April, two stores in Tennessee in May and plan to open seven more stores by the end of July. For the full fiscal year, we continue to execute our plan to open 17 to 20 stores and expand our geographic footprint. All of our new stores are performing at or above our expectations. We incurred substantial costs related to these stores and the related distribution network during the quarter, which we expect to become better levered over the balance of the year.”