Are Investors Too Bearish on Conn’s Q2?

By Chris Lange Published Sep 3, 11:03AM EDT

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Are Investors Too Bearish on Conn’s Q2? — © hikesterson / Getty Images

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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About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.