Conns February Comps Down on Weather, Port Disruptions - Analyst Blog

Conns Inc.CONN recently posted its sales data for the month of February, where total retail sales advanced 4.9% year over year to $95.4 million. However, battered by the impact of adverse weather on store traffic and deliveries, comparable store sales (comps) for the month declined 5.8%, in contrast to a 14.9% rise in the same period last year.

Shares of this Zacks Rank #5 (Strong Sell) company have slipped about 1% since the announcement.

Further, comps in the first three quarters of fiscal 2015 were substantially impacted by stricter underwriting, compared with the same period last year. Apart from this, new store openings largely affected store performances at Arizona and New Mexico. Excluding these two locations, Conns' February comps declined 3.6%.

Segment-wise, the Furniture and mattress, Consumer electronic, Home office and Other segments posted negative comps of 5.7%, 7.6%, 14.4% and 29.7%, respectively, in February. On the other hand, comps at the Home appliance segment climbed a marginal 0.8% during the month.

Also, Conns continued to face port labor disruptions, which led to lower availability of furniture products during February. This, in turn, was the primary factor accounting for weak comps at the Furniture and mattress segment.

Consumer electronic comps received some respite from greater average selling price. However, the effect was more than offset by other factors like a 9% slump in Television comps, among others.

Alongside, the company reported that in spite of a reduction in customer portfolio balance, its 60-plus day delinquency rate as of Feb 28, 2015 contracted 50 basis points (bps) from the Jan 31, 2014 data. Also, the total percentage of re-aged portfolio rose 40 bps from Oct 31, 2014 to 13.5% as of Feb 28, 2015, compared with an 80 bps increase over the same period last year.

Apart from Conns, other retailers which recently posted their comps data for February include Rite Aid Corp. RAD , Zumiez, Inc. ZUMZ and The Gap, Inc. GPS . While Gap's comps dropped 4% in the month, Rite Aid and Zumiez posted comps growth of 3.3% and 6.9%, respectively.

Overall, February comps remained soft for most retailers, given the inclement weather conditions which led to slow consumer traffic. Going forward, these retailers are hopeful of better performance, backed by the upcoming Spring season sales and expected robust hiring.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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