From Home Furnishing Business
Conn’s Q3 Loss Widens Amid Double-Digit Same-Store Sales Decline
Retailer Conn’s Inc. (NASDAQ: CONN) said its third-quarter net loss widened to $3.8 million or 12 cents per share as tighter in-house credit requirements hurt retail sales, but improved the performance of its ailing credit business.
The company said same-store sales tumbled 10.1% in the quarter ended Oct 31, but would have fallen only 0.1% if not for the tighter underwriting policies.
Total retail revenues fell 4.5% to $308.4 million. Conn’s said furniture and mattress sales, which represented 32.7% of the total, were off 6.5%, while home appliance sales fell 0.8%.
“While the near-term reduction to retail sales was anticipated, we believe the long-term benefits of improving credit quality and performance will meaningfully increase Conn's future overall profitability,” said Norm Miller, chairman, president and CEO.
"Conn's retail operation continues to perform well despite the significant impact underwriting refinements have had on sales. During the fiscal 2017 third quarter, retail gross margins improved 40 basis points from both fiscal 2017 second quarter and fiscal 2016 third quarter levels. The increase in retail gross margins is a result of improving product assortment, and warehousing and delivery efficiencies.”
Total revenues for the quarter, which include its credit business, fell 4.9% to $376.8 million.
Conn’s credit segment had a pre-tax loss of $41 million in the quarter due to heavy interest expenses and bad debt provisions.
For the nine months ended Oct. 31, total revenues rose 0.6% to $1.16 billion. The nine-month net loss totaled $25.49 million or 83 cents per share. In the first nine months of the previous fiscal year, Conn’s recorded a profit of $29.8 million or 81 cents per share.