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From Home Furnishing Business
Conn's Q4 Revenues Fall 5.2% Amid Tighter Credit Standards
April 4,
2017 by Larry Thomas in Financial Reports, Industry 
Wrapping up a "transitional year" as it propped up its struggling consumer credit business, retailer Conn's Inc. (NASDAQ:CONN) said fourth-quarter revenues fell 5.2% as the company recorded a net loss of $74,000.
The retailer, which sells furniture, appliances, electronics and home office products, said same-store sales were off 8.9% as tighter credit underwriting standards led to decreased product sales.
Total revenues for the quarter ended Jan. 31 were $432.8 million, down from $456.8 million in the same quarter the previous year.
The retailer said furniture and bedding accounted for 31.3% of product sales, but were down 3.8% from the same quarter last year. Consumer electronics accounted for 27.1% of sales, while home appliances were 23.5% of the total.
Conn's said its retail segment recorded an operating profit of $56.1 million, up from $44.9 million in the previous year's fourth quarter. But the credit segment had an operating loss of $27.4 million, up from a loss of $19.3 million in the comparable quarter.
The company said it has implemented a new lending program at its Texas and Louisiana stores that, coupled with tighter underwriting standards, should improve results in the credit segment and lead to a profitable year.
"Our credit operation continues to benefit from the structural changes we are making to increase yield, reduce losses and improve credit segment profitability," said Norm Miller, chairman, president and CEO. "While much of our focus during fiscal 2017 was on turning around the credit operation, Conn's retail business performed well. The company has created a differentiated and valuable retail experience by offering customers a large selection of brand name, top-of-the-line products, leading customer service and affordable credit programs."
For the fiscal year ended Jan. 31, total revenue was $1.596 billion, a drop of 1% from $1.613 billion the previous fiscal year.
Due largely to losses in its credit business, the company has a full-year net loss of $25.6 million or 83 cents per share. In the previous fiscal year, Conn's recorded a profit of $30.9 million or 87 cents per share.
The retailer ended the fiscal year with 113 stores in 13 states, and has opened two stores since the end of the year.