Conn’s loses $3.4 million in Q4, partly due to store closings
Beaumont, Texas — Conn’s said Thursday that it lost $3.4 million in its fiscal fourth quarter, reflecting charges tied to planned store closings and other items.
Conn’s, which sells consumer electronics, home appliances, furniture, mattresses and lawn and garden products, operates 76 stores in Texas, Louisiana and Oklahoma. It plans to close five underperforming stores and let the leases expire for two additional locations.
The retailer reported a net loss of $3.4 million for the three months ended Jan. 31, compared with net income of $1.7 million in the prior-year period.
Excluding a $2.3 million charge related to planned store closings and other items, adjusted earnings were breakeven.
Revenue rose 3% to $213.4 million, from $207.3 million. Same-store sales were up 5.2%. .
In February, Conn’s president and CEO Timothy Frank stepped down to pursue other opportunities. Theodore M. Wright was named as the interim CEO and president while the company searches for a permanent replacement.
For the year, Conn’s lost $1 million, compared with net income of $3.5 million a year ago.
Annual revenue fell 10% to $790.5 million, from $874 million.
Making sense of Simon’s inflation comment
When Walmart executives speak about prices, inflation or the nation’s economic condition their comments create quite a stir, and that’s what we saw again this week when Bill Simon spoke to USA Today.
As president and CEO of Walmart’s U.S. stores division Simon has a unique perspective on consumer spending and the rising input prices that are impacting the company’s suppliers. Therefore, when he talked to the USA Today editorial board about how the months ahead will bring serious inflation in food and clothing, people pay more attention than they do to the other retailers and economists who have made similar comments in recent months.
Simon talked about leveraging the company’s scale and working closely with suppliers to manage costs, both familiar themes at Walmart, reading between the lines it is apparent Walmart will be among the growing ranks of retailers who will need to pass price increases through to consumers in order to maintain profits. And even though he didn’t directly say Walmart would be raising prices, the company’s competitors will surely infer as much, which is welcome news for those who tend to base pricing decision off of where Walmart is at and can now anticipate somewhat of a rational pricing environment through the summer.
More food competition from Target
The PFresh initiative at Target, which results in the addition of fresh food and an expanded offering of consumables, arrived in more Target discount stores last month, further elevating the competitiveness with Walmart supercenters.
Target stores in markets such as Charlotte, Columbus, Portland, Fresno, Norfolk and New Orleans received the PFresh upgrade. In Charlotte, four store remodels were completed with three new stores slated to open during June and July. In Columbus, one remodel was completed with three new stores opening in the area this summer. In California, a total of six remodels were completed in the communities of Fresno, Visalia, Riverbank, Oakland, Hollister and Watsonville, and new store openings planned for this summer will be located in Visalia, Clovis, Porterville, Fresno, Modesto, Stockton, Turlock, Lodi and Pleasant Hill. Two store remodels were complete in Portland with three openings planned for this summer. In the New Orleans area, one store remodel will be completed with three openings planned for this summer. In Virginia, three remodels were completed in the Chesapeake area and five new stores are planned for this summer in Virginia Beach, Norfolk and Chesapeake.