Conn's May Post 3rd-quarter Loss; Shares Plunge

BEAUMONT, Texas (AP) — Consumer electronics retailer Conn's Inc. warned on Tuesday that it may post a loss for the third quarter ended Oct. 31, and withdrew its earnings outlook.

Shares plunged more than 25 percent in morning trading following the announcement.

The Texas-based retailer said that economic conditions in its markets have deteriorated significantly, with unemployment remaining high.

Preliminary sales for the first two months of the quarter ended Oct. 31 declined 1.3 percent compared with a year earlier, Conn's said.

The company decided to temporarily discontinue its practice of providing earnings guidance. Conn's said, however, that it will turn a profit in the fourth quarter, excluding special items.

In August, Conn's cut its annual profit forecast as it set aside more money to cover bad debt.

Conn's forecast a profit of $1.40 to $1.60 per share for the year ending Jan. 31. According to a Thomson Reuters survey, analysts expect $1.49 per share in profit.

Conn's said some customers have been delinquent with their payments. The retailer is trying to improve the credit quality of its portfolio with measures that include promotional credit programs for high credit quality customers.

Conn's sells consumer electronics, home appliances, furniture and mattresses, among other products. Its shares dived $3.08 to $8.96 in morning trading. They have ranged from $4.64 to $17.67 over the past year.