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Furniture retailer Conn’s consumer credit segment carries it through Hurricane Harvey aftermath in 3Q

The specialty retailer’s credit segment revenue totaled $89.8 million in the third quarter while its same-store sales dropped 4.4%
Furniture showroom
Conn’s operates 119 retail locations in the southern United States

Furniture retailer Conn’s Inc (NASDAQ:CONN) reported better-than-expected third-quarter earnings, boosted by its consumer credit segment as some of its stores combat the aftermath of Hurricane Harvey.

The specialty retailer reported earnings of $0.45 per share on revenue of $373.82 million compared with $0.05 per share on revenue of $373.172 million in the previous year’s third quarter.

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The Texas-based company beat Wall Street estimates of $0.50 EPS, but fell short of revenue expectations of $385.69 million.

Shares were up slightly to $28.90 in Tuesday pre-market trading.

CEO Norm Miller said fiscal 2019 was poised to be one of the best years of profitability in the company’s 128-year history, citing its credit spread of 940 basis points and its strong retail operating margin of 12.4%.

Its credit segment revenue totaled $89.8 million compared with $81.3 million in the previous third quarter.

Quarterly retail revenues were $284.1 million, a decrease of about 2.7% compared with $291.9 million a year ago.

Its home office unit was the sole product category on the rise, increasing 24.5%, while its furniture, mattress, home appliance and consumer electronic units decreased.

Same-store sales were down 4.4% in the quarter. The company points to new store growth as well as the lasting impact of Hurricane Harvey as reasons behind the drop.

The company operates 119 retail locations in the southern US, including 11 stores in Texas, which saw the worst of Hurricane Harvey.

“As we plan for our next fiscal year, we expect stronger retail growth driven by improving same store sales trends, coupled with opening 12 to 15 new Conn’s HomePlus locations,” stated Miller in the company’s press release.

For the fourth quarter, the company is expecting same-store sales in the markets not affected by Hurricane Harvey to grow between 4% to 6% while stores in the affected area are expected to see a drop between 9% and 7%.

 

Contact Lenore Fedow at [email protected]

Follow her on Twitter@LenoreMariee

 

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