It seems that Texans are celebrating the return of their former governor (and our former president) by buying a lot of appliances and electronics. While a new leader took the oath in Washington in January, and the consumer-driven economy continued to tumble downhill, a regional Texas-based retailer kept selling stuff like crazy.
Thursday morning, Conn's
Only hurricanes have managed to slow Conn's down lately. The company endured several days' worth of closings at many stores, and a complete evacuation of headquarters staff during last fall's visits from Ike and Gustav. That didn't stop Conn's from cleaning up on Black Friday, posting record sales in December, and rolling right through January.
Pros and Conn's
Why is Conn's so hot, and can it sustain that sales growth? The first question is relatively easy to answer, despite the tough competition. Circuit City may be in liquidators' hands, but the consumer-electronics zoo still houses some hefty gorillas, including Best Buy
Risky, you say? Sure, especially since a fair share of folks whose low credit scores wouldn't get them a loan from Citigroup
So can Conn's sustain this net sales growth? Probably not, at least in the short term. New stores can carry sales growth in slow quarters, but Conn's opened only two stores in the last quarter, and it's gotten temporarily conservative about its expansion. Still, the availability of credit creates fiercely loyal customers, which leads to strong sales even in weak economies, which eventually leads (hopefully) to sustained earnings growth, and (ideally) to very happy shareholders.
Related Foolishness:
- Things haven't been as rosy at Best Buy.
- Read about some insider selling at Conn's.
- Did you buy Conn's when you read Circuit City's obituary?