NEW YORK, March 7, 2014 /PRNewswire/ -- Bernstein Liebhard LLP today announced that a class action has been commenced in the United States District Court for the Southern District of Texas on behalf of purchasers (the "Class") of common stock of Conn's, Inc. ("Conn's" or the "Company") (NASDAQ: CONN) during the period of April 3, 2013 and February 19, 2014 (the "Class Period").
The complaint charges Conn's and three of its senior executive officers with violations of the Securities Exchange Act of 1934. Conn's, based in The Woodlands, Texas, is a specialty retailer of home appliances, furniture, mattresses and consumer electronics and a provider of consumer credit. For the twelve months ended January 31, 2013, the Company financed approximately 70.9% of its retail sales, including down payments, under Conn's in-house financing plan.
The complaint alleges that during the Class Period, defendants issued false and misleading statements or failed to disclose adverse facts regarding Conn's business and prospects, including the extent to which Conn's growth was attributable to utilizing underwriting and collections practices that weakened its portfolio quality and left it susceptible to substantial increases in bad debt, and that Conn's faced increased delinquency and charge-off rates in its credit segment. As a result of the defendants' false statements, Conn's stock traded at artificially inflated levels throughout the Class Period, reaching a high of $79.24 per share on December 26, 2013.
On February 20, 2014, the Company issued a press release announcing preliminary fourth quarter fiscal 2014 results and updating its fiscal 2015 earnings guidance. The press release revealed that the Company's "[c]redit segment provision for bad debts as a percentage of the average outstanding portfolio balance is expected to exceed previously issued full-year fiscal 2014 guidance," and that the "percentage of the customer portfolio balance 60-plus days delinquent was 8.8% at January 31, 2014, an increase of 30 basis points from October 31, 2013." In this release, the Company also revealed that it was lowering its recently issued fiscal 2015 earnings guidance. On this news, the price of Conn's common stock fell $23.91 per share, or almost 43%, on extremely heavy trading volume.Plaintiffs seek to recover damages on behalf of all Class members who invested in Conn's common stock during the Class Period. If you invested in Conn's common stock as described above, and either lost money on the transaction or still hold the security, you may wish to join in this action to serve as lead plaintiff. In order to do so, you must meet certain requirements set forth in the applicable law and file appropriate papers no later than May 5, 2014. A "lead plaintiff" is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the court must determine that the class member's claim is typical of the claims of other class members, and that the class member will adequately represent the class. Under certain circumstances, one or more class members may together serve as lead plaintiff. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. You may retain Bernstein Liebhard LLP, or other counsel of your choice, to serve as your counsel in this action.