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Conn’s Reports Second Straight Quarterly Profit
Buoyed by improvements in its long-suffering credit business, retailer Conn’s Inc. (NYSE: CONN) recorded a profit of $1.57 million or 5 cents per share in the quarter ended Oct. 31.
It was the second straight quarterly profit for the retailer of furniture, bedding appliances and consumer electronics, and it reversed a net loss in the same quarter last year.
Revenues for the most recent quarter totaled $373.1 million, down 1.8% from $376.8 million in the comparable quarter.
Revenues from its retail stores fell 5.3% and same-store sales were down 7%, but revenues from its credit segment were up 18.8%, and the operating loss in the credit business was slashed to $8.73 million from $17.6 million in the same quarter last year.
In addition, Conn’s said the percentage of accounts 60 or more days past due fell to 9.9% from 11% in the comparable quarter – the first year-over-year decline in the delinquency rate in four years – as the company has tightened its credit underwriting standards.
"Our third quarter results demonstrate the continued success of Conn's transformation, as we benefited from a record net yield, a widening credit spread, and strong retail gross margins, despite the impact Hurricane Harvey had on many of our communities," stated Norm Miller, Conn's chairman and CEO.
Furniture and mattresses continue to be Conn’s largest product categories, with sales of those products totaling $97.14 million, or 33.3% of total retail revenues.
Appliance sales totaled $83.84 million, or 28.7% of retail revenues, while consumer electronic sales were $58.06 million, or 19.9% of retail revenues.
Conn’s has 116 stores in 14 states, including three stores opened in the current fiscal year. The company said it plans to open five to nine stores in the next fiscal year, which begins Feb. 1.
For the nine months ended Oct. 31, revenues fell 5.9% to $1.095 billion. Net income for the same period totaled $3.26 million or 10 cents per share. That compared with a net loss of $25.5 million or 83 cents per share in the first nine months of the previous fiscal year.