Shares of Conns Inc. CONN have plunged 18.5% since the company released its sales data for the month ended Dec 31, 2015.
Total retail sales for December advanced 2.5% year over year to $137.5 million. Comparable store sales (comps) for the same period fell 5.6%.
Conns’ comps for the month continued to be impacted by the company’s recent decision to discontinue its video game products, digital cameras, and certain tablets. Excluding the effect from the discontinuation of these products, Conns’ December comps inched up 1.8%.
Further, the 60-plus day delinquency rate of this Zacks Rank #3 (Hold) company expanded 20 basis points (bps) year over year, while it contracted 20 bps sequentially, to 9.9% as of Dec 31, 2015.
Coming back to sales results, segment-wise, the Furniture and mattress segment posted comps growth of 13.9%, while comps at the Home appliance, Consumer electronics, Home office and other segment, declined 1.3%, 20.5%, 15.9% and 20.1%, respectively.
The Furniture and mattress segment delivered solid results, recording a rise in same store unit sales, which were partially offset by lower average selling price due to heightened promotional activity.
At the Home appliance segment, same store unit sales improved, whereas average selling prices declined year over year. In comparison, the Home office segment witnessed lower same store unit sales, which were partially compensated by higher selling prices (excluding the impact from tablets).
Finally, comparable sales from repair service agreement commissions dropped 3.7% for December.
Overall, December sales were impacted by intense promotional activity undertaken during the holiday season. Also, sales were affected by general market softness, marked by significant oil industry concentration.
Stocks to Consider
Better-ranked stocks in the same sector include Wal-Mart Stores Inc. WMT, Ross Stores Inc. ROST and The Kroger Co. KR, each with a Zacks Rank #2 (Buy).
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