Conn's Posts Downbeat Q4 Earnings, But Revenue Rises

reported weaker-than-expected earnings for the fourth quarter, but the company's revenue exceeded analysts' estimates. The Woodlands, Texas-based company posted a quarterly profit of $15.5 million, or $0.42 per share, versus a year-ago profit of $27.7 million, or $0.75 per share. The recent quarter earnings included $0.04 per share in net pre-tax charges and credits associated with facility closures, legal and professional fees related to Conn's exploration of strategic alternatives and class action lawsuits, and severance costs. Its revenue climbed 18.2% to $426.8 million. However, analysts were projecting a profit of $0.63 per share on revenue of $420.73 million. Conn's same store sales surged 1.3% in the quarter. Its total retail sales climbed 16.2% to $350.5 million, while furniture and mattress sales jumped 25% to $90.3 million. Credit revenue jumped 27.1% to $75.1 million in the quarter. For fiscal year 2016, the company expects same-store sales to range from flat to up low single digits. The company reported that it will discontinue selling video game products, digital cameras and certain tablets during fiscal year 2016. Theodore M. Wright, Conn's chairman and chief executive officer said, "In the fourth quarter, the retail segment expanded with new store growth and positive same store sales. Delinquency rates are improving; however, our provision for credit losses reflects our expectation that delinquency levels and charge-offs will remain elevated over the short-term. Underwriting standards progressively tightened over the course of fiscal 2015 and our ability to resolve less than 60-day delinquency has improved." The average estimate of 6 users surveyed by Estimize was for earnings of $0.65 per share and revenue of $430.66 million. Conn's shares slipped 3.76% to close at $28.67 yesterday.