Specialty retailer Conn's Inc. said profits more than doubled in the quarter ended Jan. 31 as it continued to focus on higher-margin goods such as furniture and bedding.
The company, which also sells appliances, consumer electronics, and lawn and garden equipment, said furniture and mattress sales accounted for 20.9% of product revenues in the quarter and 30.8% of the product gross profit.
Total revenues, including its in-house credit operation, were $250.3 million, up 10.4% from $226.7 million in the three months ended Jan. 31, 2012.
Net income was $17.7 million or 50 cents per share. That was up from $7.7 million or 24 cents per share in the comparable quarter.
Conn's said its retail gross margin was 36.9% - an increase of 7.2 percentage points from the comparable quarter. Furniture and bedding were major contributors to the jump, but the retailer said its focus on higher price-point appliances and electronics also helped drive the improvements.
For the fiscal year ended Jan. 31, total revenues were $865 million, an increase of 9.2% from $792.3 million the previous fiscal year. The company said same-store sales rose 7% for the year, which came on top of a 12.1% jump in same-store sales the previous year.
Net income was $52.6 million or $1.56 per share. That reversed a net loss in the previous year of $3.7 million or 12 cents per share.
Theodore Wright, chairman and CEO, said he's optimistic about the current fiscal year because the company will reap more benefits from the five Conn's HomePlus stores that were opened last year and the 20 existing stores that were converted to the HomePlus format.
"Average revenue for the new stores was 1.6 times the overall company average for the three months ended March 31, with approximately 36% of those sales generated from furniture and mattresses," Wright said. "Same-store sales for February and March rose 15% on a combined basis over last year despite a 3% decline in same-store sales of consumer electronics."
He said the company plans to open 10 to 12 new stores in the current fiscal year, which ends Jan. 31, 2014.
Conn's currently has 68 stores in Texas, Louisiana, Oklahoma, New Mexico and Arizona.
For the current fiscal year, the company is projecting earnings per share of $2.40 to $2.50. Same-store sales are expected to rise 3% to 8%.
