Conns Inc.’s (CONN) shares crafted a new 52-week high of $58.40 on Jul 12, 2013, before closing at $57.96. The average volume of shares traded over the last 3 months is approximately 530K. The company currently trades at a forward P/E of 22.0x, a 4.3% discount to the industry average of 23.0x.
Shares of this Zacks Rank #1 (Strong Buy) specialty retailer of durable consumer products increased 90.5% since the beginning of the year, riding on consistent share gains in the appliance market, focus on maximizing productivity and initiatives to expand its brand portfolio.
Notably, Conns boasts a history of beating the Zacks Consensus Estimate. The company reported strong first-quarter fiscal 2014 results on Jun 6, 2013, with earnings of 61 cents per share. This beat the Zacks Consensus Estimate of 56 cents, and surged 74.3% from the year-ago quarter earnings of 35 cents.
This durable consumer goods retailer outperformed the Zacks Consensus Estimate in 5 out of the last 6 quarters with an average beat of 12.6%, while reporting in-line earnings in one quarter. The long-term expected earnings growth rate for the stock is 20.3%, well above the industry growth rate of 14.7%.
Conn’s total revenue for the quarter came in at $251.1 million, up 25% from $200.9 million in the year-ago period, and came ahead of the Zacks Consensus Estimate of $241 million. Comparable-store sales also climbed 16.5%.
Buoyed by healthy results, management raised its earnings and comparable-store sales guidance range for fiscal 2014. The company now projects fiscal 2014 earnings to come in at $2.50–$2.65 per share, up from $2.40–$2.50 as forecasted earlier.
Conns also raised its comparable-store sales growth to 8%–13% from the previous projection of 3%–8%. Currently, the Zacks Consensus Estimate for fiscal 2014 is $2.63 per share.
We believe that Conns will continue performing well, given its growth initiatives such as the expansion of store base and the incorporation of technological advancements to serve clients better. The company leverages a wide network of stores to penetrate into its target markets, which enable it to generate healthy sales and gain market share.
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