Conn's Q3 Profit Doubles, Results Beats View; Lifts 2014 Earnings Outlook

(RTTNews) - Specialty retailer Conn's Inc. (CONN) on Thursday reported a profit for the third quarter that more than doubled from last year on strong revenue growth and higher same-store sales. Both revenue and adjusted earnings per share beat analysts' expectations.

Looking ahead, the company raised its outlook for fiscal 2014 earnings as well as same-store sales and also forecast earnings for fiscal 2015 above analysts' estimates.

Theodore Wright, Chairman and CEO of Conn said, "We achieved the highest quarterly revenue and net income in Conn's history. This sales trend continued into November with retail sales expanding 49%. November same store sales rose 32%."

Conn's net income for the third quarter was $24.38 million or $0.66 per share, up from $11.79 million or $0.35 per share in the year-ago period.

The latest quarter's results include pre-tax charges of $2.8 million associated with facility closures and lease terminations. The prior-year period's results included pre-tax costs of $1.5 million related to extinguishment of debt and the relocation of the company's corporate office to The Woodlands, Texas.

On an adjusted basis, earnings for the latest quarter were $26.21 million or $0.71 per share compared to $12.73 million or $0.38 per share in the prior-year quarter. On average, eight analysts polled by Thomson Reuters expected the company to report earnings per share of $0.64 for the quarter. Analysts' estimates typically exclude one-time items.

Total revenue for the quarter grew 51 percent to $310.88 million from $206.40 million in the year-ago period. Analysts had a consensus revenue estimate of $289.00 million for the quarter.

Same store sales for the quarter increased 35 percent from last year.

Retail segment revenues for the quarter surged 54 percent to $257.48 million, reflecting significant sales growth across all major product categories. Retail gross margin expanded 460 basis points from the year-ago period to 40.1 percent.

Credit segment revenues increased 38 percent from last year to $53.39 million, reflecting an increase in the average receivable portfolio balance outstanding.

Looking ahead to fiscal year 2014, Conn raised its outlook for adjusted earnings to a range of $2.75 to $2.80 per share from the prior range of $2.50 to $2.65 per share. The company now forecasts same-stores sales for the year to increase in a range of 22 percent to 25 percent, up from the prior range for an increase of 15 percent to 20 percent.

Analysts expect the company to report earnings of $2.60 per share for the year.

For fiscal 2015, Conn initiated earnings guidance in a range of $3.80 to $4.00 per share, and projects same stores sales to increase 7 percent to 12 percent. The Street expects earnings of $3.57 for the year.

CONN closed Wednesday's trading at $58.46. In Thursday's pre-market trades, the stock is up $8.54 or 14.61 percent to $67.00.