Why Shares of Conn's Jumped Today
What happened
Shares of Conn's (NASDAQ: CONN) rose on Tuesday after the retailer reported second-quarter results that beat expectations. Sales growth from furniture, mattresses, and appliances offset weakness elsewhere, driving total revenue higher. The stock was up about 15% at 10:45 a.m. EDT.
So what
Conn's reported second-quarter revenue of $401.1 million, up 4.3% year over year and nearly $3 million higher than the average analyst estimate. Retail sales rose 3.3% to $306.1 million, driven entirely by new stores. Same-store sales declined by 2.3%, with stores in areas hit by Hurricane Harvey in 2017 seeing a steeper 9.3% decline. The company believes rebuilding efforts in these markets during the second quarter of 2018 made for a difficult comparison this year.
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Furniture and mattress sales grew 2.5% to $99.5 million, while home appliance sales rose 8.6% to $99.4 million. Sales of both consumer electronics and home office products were down, with both suffering double-digit declines on a same-store basis. Credit revenue was up 7.5% year over year to $94.8 million.
Earnings per share came in at $0.62, up from $0.53 in the prior-year period and $0.11 better than analysts were expecting. Higher sales and a slight reduction in bad debt provision pushed up the bottom line.
Now what
"During the second half of this fiscal year, we expect to lap the benefits Hurricane Harvey rebuilding efforts had on same store sales, which has impacted the year-over-year sales comparison over the past four quarters," said Conn's CEO Norm Miller in prepared remarks included in the earnings release.
For the third quarter, Conn's expects a change in same-store sales of between negative 3% and positive 1%, and retail sales growth of between 4% and 8%.
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Timothy Green has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
This article was originally published on Fool.com
