Categories Earnings, Retail

Conn’s Q2 profit jumps 18% beats estimates

Conn’s Inc. (NASDAQ: CONN) reported an 18% jump in earnings for the second quarter of 2020 as new store openings, strong retail profitability, and favorable credit performance drove retail sales growth. The results exceeded analysts’ expectations.

Net income improved by 18% to $20 million or $0.62 per share. Adjusted earnings increased by 9% to $0.62 per share, which came in ahead of the analysts’ estimates of $0.51 per share.

Total revenues rose by 4% year-over-year to $401.06 million, which came in ahead of the market expectations of $379.02 million. Total retail sales were $306.1 million, up 3.3% from last year, and same-store sales increased by 0.4% in non-Hurricane Harvey markets. Total same-store sales decreased by 2.3%.

Conn's Q2 earnings review
Photo Courtesy: Conn’s

Looking ahead into the third quarter, the company expects total retail sales growth of 4% to 8% and retail gross margin of 40% to 40.5% of total net retail sales. The change in same-store sales is anticipated to be between negative 3% and positive 1%. The markets not impacted by Hurricane Harvey is predicted to be negative 2% and positive 2%, and the markets impacted by Hurricane Harvey is projected to be negative 8% and negative 4%.

During fiscal 2020, the company plans to open a total of 14 new stores in existing states to leverage current infrastructure. In addition, Conn’s announced its planned expansion into the Florida market with the first store expected to open in the second half of fiscal 2021. To support this expansion, the company plans to open a distribution center in central Florida within the next twelve months.

Read: Pivotal Software Q2 earnings preview

The company generally finance its operations primarily through a combination of cash flow generated from operations, borrowings under its Revolving Credit Facility, and securitizations of customer receivables through the capital markets. As of July 31, 2019, the company had $403 million of immediately available borrowing capacity under its $650 million revolving credit facility. Conn’s also had $7.6 million of unrestricted cash available for use.

As of July 31, 2019, the company had long-term debt and finance lease obligations of $945.98 million. This debt levels could adversely impact its financial health, ability to obtain financing in the future and to react to changes in its business.

Browse through our earnings calendar and get all scheduled earnings announcements, analyst/investor conference and much more!

Most Popular

Earnings calendar for the week of May 3

Leading stock indexes retreated after gaining mid-week when Wall Street biggies like Apple and Amazon reported impressive quarterly numbers. The Dow Jones Industrial Average was down 190 early Friday, while

How did the first quarter of 2021 turn out for the airline industry?

The airlines sector was severely impacted by the disruption caused by the COVID-19 pandemic in 2020. A year later, the industry is still limping its way to a recovery. In

Amazon (AMZN) fine-tunes growth strategy to stay in the fast lane

The company that witnessed the strongest growth during the pandemic is probably, Inc. (NASDAQ: AMZN), which went into overdrive when the crisis triggered an online shopping boom. Taking a

Add Comment
Viewing Highlight