Conn’s Cuts Q1 Loss as Credit Business Continues Improvement

June 6, 2017  by Larry Thomas in Economic News, Industry   

Conn’s, which had a net loss of $9.75 million or 32 cents per share in last year’s first quarter, said its retail business also improved profitability despite a 12.3% decline in product sales. The company said its focus on higher-margin products, combined with lower transportation, warehouse and delivery costs, led to the improved numbers.

Total revenues for the quarter ended April 30 were $355.8 million, a drop of 8.6% from $389.1 million in last year’s first quarter.

Conn’s said furniture and mattress sales, which make up about one-third of its retail segment revenues, fell 10.3% to $94.4 million. Home appliance sales, which account for about 29% of retail segment revenues, fell 8.9% to $80.1 million.

The retail segment had operating income of $32 million – down from $33.7 million in the same quarter last year – while the credit segment had an operating loss of $11.8 million. The credit segment loss, however, was well below the $21 million operating loss recorded in last year’s first quarter.

"Our first quarter performance demonstrates the progress we are making improving our financial results, while creating a sustainable platform for long-term profitable growth,” said Norm Miller, Conn's chairman, CEO and president. “The foundation of our success is Conn's differentiated business strategy, which offers our customers the ability to affordably finance top-of-the-line, brand name products for their homes. This compelling retail experience provides Conn's with a significant opportunity to grow retail sales and become a national retailer.”

Miller said he expects the retailer to be profitable for the current fiscal year, which ends in January.

Conn’s opened two stores during the first quarter and has opened one since the quarter ended, boosting its total to 116 locations in 14 states. Miller said no additional store openings are planned this year.