Conn’s, Big Lots results show related, yet unique challenges in furniture segment

Both retailers had declines in revenues and net income during their first fiscal quarter. The economy and other factors will determine how they each change course moving forward

THE WOODLANDS, Texas — Looking at the recently released financial results for Conn’s (issued June 1 for the fiscal first quarter ended April 30) and Big Lots (issued May 26 for its first fiscal quarter ended April 29) illustrate related, yet also unique challenges experienced by two major big-box stores.

Both retailers experienced declines in overall revenues, and both experienced net losses for the quarter.

In Conn’s case, total consolidated revenues, including in the credit segment, fell 16.3% to $284.6 million, from $339.8 million the same period last year. Overall retail revenues were down 17.8% to $224 million, compared to $272.5 million, which largely was driven by a 20.1% decrease in same-store sales.

Furniture and mattress sales, while a higher percentage of the total sales at 34.2% compared to 32.4% last year, fell 13.3% to $76.4 million, compared to $88.1 million last year. The same-store decline in the category was 17.1%.

The company attributed the decrease in same-store sales to lower discretionary spending of home-related products “following several periods of excess consumer liquidity resulting from the acceleration of sales.” It said the decrease was offset by new-store growth.

Revenues in its credit segment were down 8.2% to $61.8 million, compared to $67.3 million last year. This was due largely to an 8.5% decrease in the average balance in customer accounts receivable and a decline in insurance premiums, offset by an increase in late-fee revenues.

Meanwhile, Conn’s net loss for the period was $35.4 million, or $1.47 per share, compared to net income of $6.2 million, or 25 cents per share the same period last year. Its adjusted net loss, which excludes charges and credits related to the sale of a property that were partially offset by its decision to end its store-within-a-store test with Belk, was $36.6 million, or $1.52 per diluted share.

Its overall operating loss for the retail segment was $19.7 million, compared to a loss of $2.1 million for the same period last year. It was primarily due to the decrease in revenue.

Gross margin in the retail segment was 33.5%, down 100 basis points from the 34.5% reported the same period last year. This was due to the deleveraging of fixed distribution costs and an increase in product costs due to higher freight. This was partially offset by a more profitable profit mix.

Interim President and CEO Norm Miller said the first-quarter results were generally in line with customer expectations, reflecting a “challenging macroeconomic environment. Despite a difficult backdrop, we continue to refocus our efforts to better serve our core credit-constrained consumers, grow our e-commerce business and launch our own in-house lease-to-own offering.”

He added that those efforts increased credit applications during the quarter by 9.7% and added that e-commerce sales increased 24.6% during the quarter, due to a successful e-commerce platform conversion last year and recent enhancements to its applications process.

Big Lots experienced an 18.3% decline in revenues, which totaled $1.124 billion, compared to $1.375 billion the same period in 2022. The company said this was driven by a comparable-store sales decline of 18.2%. It also estimated that comparable sales were negatively impacted to the tune of 300 basis points by furniture shortages due to the sudden closure of United and sister company Lane this past November.

Its net loss totaled $206.1 million, or $7.10 per share, compared to a net loss of $11.1 million, or 39 cents per share last year.

Company President and CEO Bruce Thorn said that macroeconomic headwinds contributed to the challenges seen in its results and outlook.

“But we are confident that these headwinds will abate, and that when they do, we will se a major boost to our business,” he said, adding that the retailer expects that furniture and seasonal lawn and garden sales impacted by negative weather during the quarter to return to “being the strong growth drivers for our business they have in the past, as consumer confidence improves and as we continue to bring newness and incredible value to our assortment.”

Obviously its furniture fortunes are tied to upholstery produced under the Broyhill brand name, which it acquired as part of the Heritage Home bankruptcy in 2018.

The Broyhill products were once produced by now-shuttered Lane furniture plants, leaving an uncertain future for the furniture segment. However, once it finds an alternative sourcing solution, it makes sense for it to continue merchandising sofas and sectionals under the Broyhill brand, which has extended to many other categories sold at Big Lots, from rugs and bed linens to candles and bath towels, to name several.

A look at the company’s website shows it advertised plenty of specials for Broyhill upholstery during the recent Memorial Day weekend, an indication that it continues to push the category hard amidst a shift in manufacturing partners. Hopefully for the company, its customers and its shareholders, those efforts will produce meaningful results in the coming quarters, particularly as consumers flock to the values and affordability the Broyhill line has represented in the past.

As for Conn’s, its sales across a broad range of categories, from furniture, appliances and consumer electronics, will undoubtedly be impacted by the ongoing economic malaise many other retailers continue to experience. Yet, as expected, the company had this hopeful message:

“While we expect a challenging economic landscape to continue throughout the year, we believe we are on the right track to emerge from this period as a stronger, profitable company that is well positioned to serve the growing needs of our core credit-constrained customers,” Miller said.

Thomas Russell

Home News Now Editor-in-Chief Thomas Russell has covered the furniture industry for 25 years at various daily and weekly consumer and trade publications. He can be reached at and at 336-508-4616.

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