Retail

What to Expect When Conn's Reports Before Tuesday's Opening Bell

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Conn’s Inc. (NASDAQ: CONN) is scheduled to release its fiscal third-quarter results before the opening bell on Tuesday. The consensus estimates are calling for $0.54 in earnings per share (EPS) and $394.29 million in revenue. The same period of last year reportedly had $0.59 in EPS and $373.8 million in revenue.

In the fiscal second quarter, the company reported that total net sales increased 3.3% year over year to $306.06 million, while finance charges and other revenues increased 7.6% to $95.0 million.

Also at that time, Conn’s issued guidance for the fiscal third quarter saying that it expects to see total retail sales growth in the range of 4% to 8% with a retail gross margin between 40.0% and 40.5%.

The increase in retail revenue was primarily driven by new store growth, partially offset by a decrease in same-store sales of 2.3%. The decrease in same-store sales was driven by a decrease of 9.3% in markets affected by Hurricane Harvey, partially offset by an increase of 0.4% in markets not affected by the hurricane. Note that same-store sales include e-commerce sales.

During the second half of this fiscal year, management expects to lap the benefits Hurricane Harvey rebuilding efforts had on same-store sales, which has affected the year-over-year sales comparison over the past four quarters.

Management also said that e-commerce sales are quickly ramping and the retailer is well-positioned to serve customers online.

Excluding Monday’s move, Conn’s had underperformed the broad markets, with its stock up about 3% year to date. In the past 52 weeks, the stock was down closer to 22%.

Shares of Conn’s were last seen up about 3% at $20.03, in a 52-week range of $15.40 to $27.57. The consensus price target is $33.83.


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