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Conn’s, Inc. Reports Fiscal 2014 Fourth-Quarter And Full-Year Financial Results

Stocks in this article: CONN

Conn’s, Inc. (NASDAQ:CONN), a specialty retailer of home appliances, furniture, mattresses, consumer electronics and provider of consumer credit, today announced financial results for the quarter and fiscal year ended Jan. 31, 2014.

Full-year fiscal 2014 highlights include (on year-over-year basis unless noted):

  • Consolidated revenues increased 38.0% to $1.19 billion;
  • Same store sales grew 26.5%;
  • Opened 14 new locations in six new markets;
  • Retail gross margin expanded 470 basis points to 39.9%;
  • Retail segment adjusted operating income rose 140.5% to $136.1 million;
  • Credit segment adjusted operating income was $27.8 million, a 40.7% decrease;
  • Credit segment provision for bad debts was 11.0% of the average outstanding portfolio balance;
  • Adjusted diluted earnings increased 57.7%, to $2.57 per share, from $1.63 per share; and
  • Diluted earnings grew 62.8%, to $2.54 per share.

Fourth-quarter fiscal 2014 significant items include (on year-over-year basis unless noted):

  • Consolidated revenues increased 44.3% to $361.1 million;
  • Same store sales grew 33.4%, with the pace of expansion decelerating in January to 18.3%;
  • Opened eight new locations in four new markets;
  • Retail gross margin expanded 370 basis points to 40.6%;
  • Selling, general and administrative expense as a percent of revenue improved 220 basis points to 26.9%, as retail sales leverage was realized;
  • Retail segment adjusted operating income rose 147.4% to $49.1 million;
  • Adjusted credit segment operating loss was $1.9 million, declining $15.5 million;
  • The percentage of the customer portfolio balance 60+ days delinquent was 8.8% as of Jan. 31;
  • Credit segment provision for bad debts on an annualized basis was 15.1% of the average outstanding portfolio balance;
  • Adjusted diluted earnings grew 37.0%, to $0.74 per share, from $0.54 per share; and
  • Diluted earnings increased 50.0%, to $0.75 per share.

Theodore M. Wright, Conn’s Chairman and Chief Executive Officer stated, “Total revenues rose 44% in the fourth quarter and adjusted earnings per diluted share increased 37%. Same store sales increased 33%, with growth in each of our categories. Higher-margin furniture and mattress product same store sales increased 60%. Our business model demonstrated its strength and resilience despite the challenges from portfolio growth and weather in our credit operation in the fourth quarter.

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