Port dispute, weather slam Conn's deliveries

The labor dispute at the West Coast ports and harsh winter weather are among the reasons Conn's reported a drop in same store sales for February.

Conn's said same store sales dropped 5.8% in February, compared to a 14.9% increase in the prior-year period.

"During the month, store traffic and delivery of items purchased were negatively impacted by weather,” said Conn’s Chairman and CEO Theodore M. Wright. “In addition, due to the prolonged port labor disruption which had a higher impact than prior months, lower availability of furniture product contributed to a decrease in same store sales of 8% for the furniture category. To illustrate the relative impact of the port disruption on the furniture category, mattresses, which are sourced domestically, had an increase in same store sales of 2.5%. Inventory availability should improve but we do not expect it to return to normal in March. Customer purchases awaiting delivery due to both inclement weather and port disruption increased approximately $3.6 million, or 36.9%, from the end of January. Sales are recorded when the customer receives the product."

The company also said that consumer electronic comps were down 7.6% while home office comps plunged 14.4%. Conn's also provides consumer credit and saw its 9.2% February delinquencies more than 60 days due down 50 basis points vs. January.

"We continue to experience headwinds from tighter underwriting implemented during the first three quarters of fiscal year 2015 compared to the same period a year ago, with an estimated impact of approximately 5-7% in the month,” Wright added. “Tighter underwriting, along with additional store openings, particularly impacted our Arizona and New Mexico stores. Excluding Arizona and New Mexico locations, same store sales decreased 3.6% for the month." Conn’s said same store unit sales increased in the mattress and home appliance categories. Same store unit sales in consumer electronics and home office were down, partially offset by higher average selling prices. Television same store sales decreased 9.0%."

Conn’s operates approximately 90 retail locations in Arizona, Colorado, Louisiana, Mississippi, Nevada, New Mexico, North Carolina, Oklahoma, South Carolina, Tennessee and Texas.