Conn’s posted mixed results in the third quarter, with the retailer growing its net income although comps declined.
For the third quarter, Conn’s posted net income of $1.6 million, or five cents per diluted share, versus a net loss of $3.8 million, or 12 cents per diluted share, for the period a year earlier.
Conn’s reported adjusted net income of $5.6 million, or 18 cents per diluted share, for the quarter, which excludes a loss from the write-off of previously capitalized costs for a software project related to the implementation of a new point of sale system that the company abandoned, and a loss from extinguishment of debt related to the early redemption of its 2016-A Notes. The third quarter figure compares with adjusted net loss of $2.5 million, or eight cents per diluted share, as recorded in the year-past period.
Comparable store sales decreased by 7%. By department, furniture and mattress comps slipped 6.1%, home appliance comps slipped 3.3%, consumer electronics comps slipped 10.7% and home office comps slipped 8.1%.
With Conn’s credit operations aside, total retail revenues were $291.9 million versus $308.4 million for the year-previous third quarter. The decrease in retail revenue primarily resulted from the comp decline partially offset by new store growth.
“Our third quarter results demonstrate the continued success of Conn’s transformation, as we benefited from a record net yield, a widening credit spread, and strong retail gross margins, despite the impact Hurricane Harvey had on many of our communities,” said Norm Miller, Conn’s chairman and CEO. “Retail performance remains solid, and Conn’s achieved record third quarter retail gross margins, which helped produce another quarter of strong retail operating income. With improving credit trends, we are increasingly confident that the investments we have made in the credit platform can support profitable growth. For fiscal year 2019, we are planning to open five to nine new stores, all in existing states, which will allow us to leverage our current infrastructure. I am encouraged by the successful transformation underway at Conn’s, and the long-term opportunities to create sustainable growth and profitability.”