Conn’s, Inc. Experiences Second Quarter Fiscal 12 months 2022 Monetary Outcomes

Conn’s, Inc., a specialty retailer of furnishings and mattresses, house home equipment, shopper electronics and residential workplace merchandise, and supplier of shopper credit score, immediately introduced its monetary outcomes for the quarter ended July 31, 2021.

 

“Robust second quarter retail and credit score outcomes exceeded our expectations and show that our development methods are taking maintain. Second quarter identical retailer gross sales elevated 16.4% and whole retail gross sales are up 24.0% over the prior yr interval. Robust retail efficiency mixed with a second quarter credit score unfold of 1,200 foundation factors, contributed to document second quarter earnings per diluted share. In reality, earnings per diluted share of $2.74 for the primary six months of the yr are increased than any annual earnings in Conn’s 131-year historical past,” acknowledged Chandra Holt, Conn’s Chief Government Officer.

 

“Momentum stays optimistic throughout our enterprise reflecting sturdy shopper demand and the expansion methods now we have put in place. Complete retail gross sales for the primary half have elevated on the quickest development fee in seven years. Because of this, we’re growing our fiscal yr 2022 identical retailer gross sales expectation from excessive single-digit identical retailer gross sales development to mid-teens identical retailer gross sales development,” continued Ms. Holt.

 

“I consider Conn’s is properly positioned to proceed to innovate, develop and capitalize on an infinite addressable market. As my tenure as CEO begins, I’m excited by the path Conn’s is headed and the alternatives now we have to create sustainable worth for our shareholders. I additionally need to thank all our crew members for his or her contributions to our success and their continued dedication,” concluded Ms. Holt.

 

Second Quarter Monetary Highlights as In comparison with the Prior Fiscal 12 months Interval (Except In any other case Famous):

• Internet earnings elevated to a second quarter document of $1.22 per diluted share, in comparison with $0.70 per diluted share for a similar interval final fiscal yr;
• Similar retailer gross sales elevated 16.4% for the second quarter of fiscal yr 2022 as in comparison with the second quarter of fiscal yr 2021 and elevated 3.2% on a two-year foundation;
• Robust identical retailer gross sales mixed with the contribution of latest showrooms drove a 24.0% improve in whole retail gross sales for the second quarter;
• eCommerce gross sales elevated 210.9% to a quarterly document of $17.3 million;
• Lease-to-own gross sales elevated 70.3% to $41.6 million;
• At July 31, 2021, the carrying worth of buyer accounts receivable 60+ days overdue declined 42.1% year-over-year to the bottom stage in eight fiscal years, and the carrying worth of re-aged accounts declined 44.5% year-over-year to the bottom stage in six fiscal years; and
• Complete debt decreased from $749.7 million at July 31, 2020 to $439.6 million at July 31, 2021, a lower of 41%. Internet debt as a % of the portfolio steadiness at July 31, 2021, was roughly 36%, in comparison with 50% at July 31, 2020, and represents the bottom stage in over a decade.

Second Quarter Outcomes

Internet earnings for the three months ended July 31, 2021 was $37.0 million, or $1.22 per diluted share, in comparison with web earnings for the three months ended July 31, 2020 of $20.5 million, or $0.70 per diluted share. On a non-GAAP foundation, adjusted web earnings for the three months ended July 31, 2021 was $37.0 million, or $1.22 per diluted share. This compares to adjusted web earnings for the three months ended July 31, 2020 of $21.7 million, or $0.75 per diluted share, which excludes skilled charges related to non-recurring bills.

Retail Section Second Quarter Outcomes 

Retail revenues have been $347.0 million for the three months ended July 31, 2021 in comparison with $279.9 million for the three months ended July 31, 2020, a rise of $67.1 million or 24.0%. The rise in retail income was primarily pushed by a rise in identical retailer gross sales of 16.4% and by new retailer development. The rise in identical retailer gross sales displays a rise in demand throughout all the Firm’s home-related product classes. The rise additionally displays the influence of prior yr proactive underwriting adjustments and trade broad provide chain disruptions, every of which was the results of the COVID-19 pandemic.

For the three months ended July 31, 2021 and 2020, retail section working earnings was $28.7 million and $23.2 million, respectively. The rise in retail section working earnings for the three months ended July 31, 2021 was primarily attributable to a rise in income.

 

Credit score Section Second Quarter Outcomes 

Credit score revenues have been $71.4 million for the three months ended July 31, 2021 in comparison with $87.0 million for the three months ended July 31, 2020, a lower of $15.6 million or 17.9%. The lower in credit score income was primarily attributable to a 22.7% lower within the common excellent steadiness of the shopper receivable portfolio. These decreases have been partially offset by a rise within the yield fee, from 23.2% for the three months ended July 31, 2020 to 23.3% for the three months ended July 31, 2021 and a rise in insurance coverage commissions.

Provision for dangerous money owed was $10.1 million for the three months ended July 31, 2021 in comparison with $31.9 million for the three months ended July 31, 2020, a lower of $21.8 million. The change was primarily pushed by a year-over-year lower in web charge-offs of $43.8 million, partially offset by a smaller lower within the allowance for dangerous money owed in the course of the three months ended July 31, 2021 in comparison with the three months ended July 31, 2020. The smaller lower was pushed by a decrease year-over-year decline within the buyer accounts receivable portfolio steadiness, partially offset by a $5.0 million lower within the financial adjustment that was pushed by an enchancment within the forecasted unemployment fee.

Credit score section working earnings was $25.5 million for the three months ended July 31, 2021, in comparison with $18.2 million for the three months ended July 31, 2020. The rise was primarily because of the lower within the provision for dangerous money owed partially offset by the lower in credit score income.

Further info on the credit score portfolio and its efficiency could also be discovered within the Buyer Accounts Receivable Portfolio Statistics desk included inside this press launch and within the Firm’s Type 10-Q for the quarter ended July 31, 2021, to be filed with the Securities and Change Fee on September 1, 2021 (the “Second Quarter Type 10-Q”).

Showroom and Amenities Replace

The Firm opened three new Conn’s HomePlus^® showrooms in the course of the second quarter of fiscal yr 2022, all inside the state of Florida, bringing the overall showroom depend to 155 in 15 states. Throughout fiscal yr 2022, the Firm plans to open a complete of 11 to 13 new showrooms (inclusive of the 9 new showrooms opened in the course of the first half of fiscal yr 2022).

Liquidity and Capital Assets

As of July 31, 2021, the Firm had $362.9 million of instantly out there borrowing capability beneath its $650.0 million revolving credit score facility. The Firm additionally had $8.7 million of unrestricted money out there to be used.

 

 

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About Conn’s, Inc.

Conn’s is a specialty retailer at present working 155 retail places in Alabama, Arizona, Colorado, Florida, Georgia, Louisiana, Mississippi, Nevada, New Mexico, North Carolina, Oklahoma, South Carolina, Tennessee, Texas and Virginia. The Firm’s main product classes embrace:

• Furnishings and mattress, together with furnishings and associated equipment for the lounge, eating room and bed room, in addition to each conventional and specialty mattresses;
• House equipment, together with fridges, freezers, washers, dryers, dishwashers and ranges;
• Client electronics, together with LED, OLED, QLED, 4K Extremely HD, and 8K televisions, gaming merchandise, subsequent era online game consoles and residential theater and transportable audio tools; and
• House workplace, together with computer systems, printers and equipment.

Moreover, Conn’s gives quite a lot of merchandise on a seasonal foundation. In contrast to lots of its opponents, Conn’s supplies versatile in-house credit score choices for its clients along with third-party financing packages and third-party lease-to-own fee plans.