Conns Inc. CONN recently posted mixed sales data for the month of March, wherein total retail sales witnessed a positive trend whereas comparable store sales (comps) declined year over year.
Total retail sales for the month ended Mar 31, 2015 climbed 3.4% year over year to $103.7 million. However, comps for the month declined 6.8%, in sharp contrast to an 18.1% improvement recorded in the same period a year ago. The fall in comps is mainly attributable to the impact of lingering port labor disruptions.
Also, the company estimates that the impact of tighter underwriting standards affected comps for March by 4%–5%. However, Arizona and New Mexico stores remained cushioned to a large extent from this hurdle, when compared with the comparable year-ago period. Going forward, management anticipates continuing to bear the impact from these headwinds, which were executed in the first three quarters of fiscal 2015.
Segment-wise, the Furniture and mattress, Consumer electronic, Home office and Other segments posted negative comps of 9.9%, 4.7%, 16.2% and 32.5%, respectively, for March. On the other hand, comps at the Home appliance segment remained flat year over year.
As this Zacks Rank #3 (Hold) company continued to face port labor disruptions, its inventory level suffered, leading to lower availability of furniture products during March. This, in turn, was the primary factor that accounted for weak comps at the Furniture and mattress segment. Though inventory availability is expected to show some improvement, scarcities are likely to prevail throughout April.
Consumer electronics comps were mainly hurt by a 2.8% fall in Television comps. The Home office segment witnessed a fall in same store unit sales, partly compensated by greater average selling prices. However, the Home appliance segment benefitted from higher same store unit sales, offset by lower average selling prices.
Alongside, the company reported its 60-plus day delinquency rate as of Mar 31, 2015 that expanded 50 basis points (bps) year over year, while contracting 50 bps sequentially to 8.7% during March.
While Conns reported negative comps, many other retailers posted positive comps data for March. These include Rite Aid Corp. RAD, Zumiez, Inc. ZUMZ and The Gap, Inc. GPS, which witnessed comps growth of 4.3%, 5.5% and 2%, respectively.
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