Are Investors Too Bearish on Conn’s Q2?
Conn’s reported mixed fiscal second-quarter financial results and offered no guidance before the markets opened on Thursday.
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When Conn’s Inc. (NASDAQ: CONN) reported its fiscal second-quarter financial results before the markets opened on Thursday, the furniture and appliances retailer posted $0.70 in earnings per share (EPS) and $366.92 million in revenue. That compared with consensus estimates of a net loss of $0.13 per share and $377.68 million in revenue, as well as the $0.62 per share and $401.06 million posted in the same period of last year.
Retail revenues were $279.7 million, a decrease of $26.4 million, or 8.6%. This was driven primarily by a 13.2% decrease in same-store sales, partially offset by new store growth. The decrease in same-store sales reflects proactive underwriting changes and industrywide supply chain disruptions, each of which was the result of the COVID-19 pandemic.
Separately, Credit revenues were $87.0 million, a decrease of $7.8 million year over year, or 8.2%. Cash and third-party sales grew 51% compared to the prior fiscal year period reflecting strong demand for home-related products. At the same time, e-commerce sales grew 72% year over year.
On the books, Conn’s cash and cash equivalents totaled $6.39 million at the end of the quarter, up from $5.49 million at the end of the previous fiscal year.
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The company did not issue any guidance for the fiscal third quarter, but this is not uncommon as COVID-19 has created much uncertainty in the market. Consensus estimates call for a net loss of $0.06 per share and $352.02 million in revenue for the quarter.
Conn’s stock traded down more than 12% to $12.00 on Thursday, in a 52-week range of $2.83 to $27.57. The consensus price target is $12.17.
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Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
His work has been quoted, or referenced by a number of outlets including Business Insider, USA Today, Yahoo Finance, MSN, The Motley Fool, and many other publications. A graduate of Southwestern University, he studied business with a focus on investments and has previous experience in banking and startups.
When not reading or writing the news, he is following his passion for Lacrosse, playing chess, or building solar projects with his dad.
