Conn’s said that Hurricane Harvey’s impact will hit third quarter results. In its second quarter, the retailer saw comps decline although it did post a profit.
The retailer posted net income of $4.3 million, or 14 cents per diluted share, versus a net loss of $11.9 million, or 39 cents per diluted share, in the year-prior period. Adjusted net income, excluding one-time charges, was $8.2 million, or 26 cents per diluted share, versus a loss of $1.2 million, or four cents per diluted share, in the quarter a year previous. Conn’s topped a MarketBeat published analyst average estimate that called for a two-cent per adjusted diluted share loss of two cents.
However, comparable store sales fell 15.1% in the second quarter as product sales comps fell 15% and services comps fell 15.7%. Furniture and mattress department comps plunged 12.8%, while those for home appliance slid 13.7%, those for consumer electronics tumbled 19.5%, and those for home office slipped 17.6%. The comp declines resulted from unit volume decreases partially offset by average selling price increases in the furniture, mattresses and consumer electronics segments.
Net sales in the quarter were $286.4 million versus $332 million last year and total revenues, including the company’s credit operation, were $366.6 million versus $398.2 million in the year-earlier period.
Hurricane Harvey forced Conn’s to temporarily shut 23 of its 116 stores and its corporate office in Beaumont, TX, as well as distribution and service centers in Beaumont and Houston, but all its facilities are now open for business again, the company said.
Conn’s stated that it lost about 100 selling days due to the storm’s effect, adding that the company’s retail sales and consumer credit collections would continue to feel effects in local communities hit by the hurricane. Because of the near-term uncertainty Harvey has created, Conn’s will not provide specific financial guidance for the third quarter. However, Conn’s noted that it expects retail sales to rebound as rebuilding efforts get underway.
“I am pleased to announce that Conn’s returned to profitability during the second quarter of fiscal year 2018,” said Norm Miller, Conn’s chairman, president and CEO. “This achievement is the direct result of Conn’s differentiated and highly profitable retail model, the initiatives implemented to turn around our credit business, and the talented and experienced team we have assembled.”
