Conn's dragged down by ports dispute, tight credit

Supply chain disruptions from the West Coast port labor dispute and tighter underwriting for its in-house consumer credit curbed same-store sales at Conn’s in the first quarter.

The specialty retailer of furniture, mattresses, home appliances, consumer electronics said that same store sales declined 4.3%. It reported $96.9 million in total retail net sales for the month ended April 30, a 12% increase compared to the same prior year period. For the three months ended April 30, 2015, total retail net sales were $296 million, a 6.6% increase compared to the prior year quarter.

Theodore M. Wright, Conn’s chairman and chief executive officer, said: "Greater than 60-day delinquency was 8.4% as of April 30, 2015, compared to 8.0% as of April 30, 2014, with a sequential decrease of 30 basis points from March 31, 2015. "As expected, same store sales in April and for the quarter were negatively impacted by tightened underwriting and supply chain disruption attributable to the prolonged port labor dispute. Same store sales for the month increased 0.3% against an increase of 12.9% in April last year.

Same store sales were positive during the latter part of April as inventory availability improved with the resolution of the port labor dispute. We expect inventory to continue to improve and shortages to have less of an impact on May sales.”

The company said it expects reduced sales volume as compared to the same periods a year ago from tighter underwriting implemented during the first three quarters of fiscal 2015, with an estimated impact of approximately 3-5% to same store sales in the quarter.

Conn’s is a specialty retailer currently operating approximately 90 retail locations in Arizona, Colorado, Louisiana, Mississippi, Nevada, New Mexico, North Carolina, Oklahoma, South Carolina, Tennessee and Texas.