Conn's Goes from Loss to Profit in Q3; Furniture, Mattresses Drive Sales
THE WOODLANDS, Texas-Increased sales and reduced expenses transformed Conn's bottom line from red to black in its fiscal third quarter, which ended on Oct. 31.
The home specialty retailer reported net income of $11.8 million in the quarter, compared to a net loss of $12.7 million in the third quarter of last year.
Net sales rose 8 percent to $167.3 million, including a gain in same-store sales of 12.6 percent. Checkouts got a significant boost from sales of furniture and mattresses, which together jumped 31.7 percent.
Reductions in costs of goods and parts sold helped elevate gross margin by 941 basis points, to 48.1 percent. Selling, general and administrative expenses edged up 2.4 percent but were slimmed 238 basis points as a percentage of sales, to 29.7 percent.
Based on the third-quarter results, Conn's said it expects same-store sales for the fiscal year as a whole to be up from 13 to 16 percent. For the next fiscal year, the expectation is for same-store sales to range from flat to up 5 percent.