Conn’s Announces Financial Results for Quarter Ending July 31

August 30, 2023  by HFBusiness Staff in Business Strategy, Industry   

“Strategic initiatives focused on turning around our retail performance and better serving our core credit-constrained consumers are taking hold and continue to perform in line with our expectations,” stated Norm Miller, interim president and CEO.

“During the second quarter, we experienced improving sales trends in our Conn’s in-house and lease-to-own offerings and record quarterly eCommerce revenue. In addition, the recent enhancements to our marketing strategies and credit application process drove a 30.6% increase in applications during the second quarter, which resulted in an increase in sales financed through Conn’s in-house credit offering,”

“Retail gross margin grew 230 basis points over the prior year period to the highest level in seven quarters, as we benefit from pricing and assortment changes, we have made since the end of last year. In addition, credit quality remains stable and in line with our expectations.”

“As we navigate a fluid economic environment, we continue to leverage our powerful value proposition to serve our core credit-constrained consumers and drive sales, while remaining focused on improving profitability and controlling credit risk,” concluded Mr. Miller.

"Under Norm's leadership, the Company has quickly moved to stabilize performance throughout a challenging macro-economic environment. Conn's return to a strategy focused on serving the core credit-constrained customer is turning around retail performance and repositioning the business for growth. The Board is confident in the direction Conn’s is headed and believes the Company is well positioned to create lasting value for shareholders,” added Bob Martin, lead independent director.

Second Quarter Financial Highlights as Compared to the Prior Fiscal Year Period (Unless Otherwise Noted):

• Total consolidated revenue declined 11.5% to $306.9 million, due to a 12.8% decline in total net sales, and a 5.5% reduction in finance charges and other revenues;

•  Same store sales decreased 15.4%, which is the third quarter of sequential improvement and an over 1,000 basis point improvement from last year’s third quarter;

•  eCommerce sales increased 41.5% to a second quarter record of $27.2 million;

•  Retail gross margin increased to 36.9% from 34.6% in the prior year;

•  Credit applications increased by 30.6% year-over-year, which resulted in the first quarter of positive sales financed through Conn’s in-house credit offering in six quarters;

•  Reported a net loss of $1.39 per diluted share, compared to net income of $0.09 per diluted share for the same period last fiscal year; and

•  The Company improved its capital position and access to liquidity by closing a $50 million Delayed Draw Term Loan on July 31, 2023 and closing a $273.7 million asset-backed security (ABS) transaction on August 17, 2023 demonstrating the Company’s ability to access the capital markets even during volatile market conditions.