) hit a 52-week high of $28.10 on November 8 after releasing
preliminary sales and gross margin numbers for the fiscal third
quarter. Shares of this Zacks #1 Rank (Strong Buy) specialty
retailer of durable consumer products have more than doubled in
price since the beginning of the year, riding bullish traits such
as strong same-store sales momentum, constant share gains in the
appliance market, the ability to charge higher price points than
peers, strong margin improvement, unit remodeling and an increase
in its credit portfolio balance.
Preliminary 3Q Sales and Gross Margin
On November 8, Conns reported preliminary sales, same store sales
and gross margin results for the third quarter of fiscal 2013. Net
sales were up 8% year over year to $167.3 million, compared to the
Zacks Consensus Estimate of $199 million.
Same store sales increased 12.6% during the quarter, marking the
fifth consecutive double-digit same store sales growth for the
company. The upside in retail sales was driven by higher average
selling prices, increased furniture and mattress offering and
growth in home office sales. This was offset by declines in unit
volume due to previously closed stores.
Retail gross margin was 35% in the quarter, up 970 basis points
year over year. A favorable sales mix across all product
categories, combined with expansion of the furniture and mattress
business, largely drove retail gross margin in the quarter.
Conns is scheduled to release its complete fiscal 2013 third
quarter results on December 3, 2012.
Preliminary Results Drive Estimates
Following the preliminary results, earnings estimates have been
trending higher in the past 7 days. The Zacks Consensus Estimate
for fiscal 2013 rose 2.7% to $1.52 per share as 4 of 7 estimates
were revised higher. This represents year-over-year growth of
The Zacks Consensus Estimate for fiscal 2014 advanced 3.3% to $1.90
per share over the same time frame as, again, 4 of 7 estimates
advanced, reflecting a year-over-year increase of 24.8%.
Shares of Conns have recorded a year-to-date return of 128.8%,
which shows that it is gaining from its earnings and sales
Moreover, shares have continually traded above the 200-day moving
average since the beginning of calendar year 2012. The stock is
also trading above its 50-day moving average since July 26, 2012.
Additionally, the company has outperformed the S&P 500 Index
since February 6, 2012.
Founded in 1890 and headquartered in Beaumont, Texas, Conns is a
retailer of durable consumer products in the United States. The
company deals in home appliances, furniture and mattress, consumer
electronics and home office products. Additionally, the company
offers a variety of products on a seasonal basis, including lawn
and garden equipment. The company also provides flexible in-house
credit options for its customers, in addition to third-party
financing programs and third-party rent-to-own payment plans. Conns
has a market cap of 868.8 million.
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