Conn’s Beats Q4 Wall Street Estimate As Financials Gain

The fourth quarter provided a strong finish to Conn’s fiscal year as the company reported growth in sales and net income for the period ended January 31. 

Conn’s posted net income of $29.5 million, or $0.91 per diluted share, versus $3.2 million, or $0.10 per diluted share, in the period a year earlier. Adjusted net income was $31 million, or $0.96 per diluted share, excluding one-time charges that included an increase in direct tax audit reserve, the company reported, compared with $17.9 million, or $0.56 per diluted share, in the fiscal year prior, which excludes the impact of the Tax Cut and Jobs Act, costs associated with a facility relocation and contingency reserves related to legal matters.

Conn’s adjusted earnings per diluted share topped a MarketBeat published analyst consensus estimate of $0.76.

Net sales were $338.7 million versus $334.5 million in the quarter a year previous, while net revenues, including finance charges and other revenues, were $433 million versus $420.4 million. Operating income was $53.8 million versus $44.8 million in the period a year before.

Retail segment revenues were $338.9 million versus $334.5 million in the year-earlier quarter. Company officials said retail revenue growth came from new store growth and a 3.7% comparable store sales increase in markets not impacted by Hurricane Harvey, partially offset by a comp decrease of 12.9% in markets affected by the storm.

Comps decreased 1.4% overall in the quarter year over year, as, segment by segment, comps decreased 5.7% in Furniture and Mattress, decreased 3.2% in Home Appliances, increased 6.5% in Consumer Electronics, decreased 0.9% in Home Office and decreased 10.2% in Other, the company said.

Retail segment operating income was $54.7 million versus $48.6 million, in the year-previous quarter. Adjusted retail segment operating income was $56.7 million versus $50.8 million in the year-before period.

For the full fiscal year, Conn’s posted net income of $73.8 million, or $2.28 per diluted share, versus $6.5 million, or $0.20 per diluted share, in the fiscal year prior.

Net sales were $1.19 billion flat with the year previous, while net revenues were $1.55 billion versus $1.52 billion in the fiscal year previous. Operating income was $161.3 million versus $115.1 million in the year before.

“Fiscal year 2019 was a historic year for Conn’s and reflects the growing momentum in our business,” said Norm Miller, Conn’s chairman and CEO. “For fiscal year 2019, same-store sales, retail gross margin, bad debt charge-offs and overall profitability improved significantly compared to the prior year. Retail growth strategies underway produced a 3.7% increase in non-Harvey same-store sales during the fourth quarter.”

He continued, “For fiscal year 2020, we continue to expect positive same-store sales trends and plan to open 12 to 15 new Conn’s HomePlus locations.  With only 125 stores across 14 states, we have a significant opportunity to serve customers throughout the country with our unmatched value proposition. As we enter the new fiscal year, we are excited with our strong financial and operating position allowing us to focus on retail expansion.”