Conn's Q1 Profit Rises, Results Beat Estimates, Backs Full-year View; Shares Up

(RTTNews) - Specialty retailer Conn's Inc. (CONN) Monday reported a higher first-quarter profit, as revenues climbed about 34 percent, with 16 percent growth in same store sales. Earnings per share, as well as revenues beat analysts' expectations. Conn's also reaffirmed its fiscal year 2015 adjusted earnings guidance. The shares rose about 7 percent in the morning trade.

For the first quarter ended April 30, 2014, the company's net income increased to $28.47 million or $0.77 per share from $22.18 million or $0.61 per share in the previous year.

On an adjusted basis, earnings were $0.80 per share, while the firm posted $0.61 per share in the prior year. On average, eight analysts polled by Thomson Reuters expected the company to report earnings of $0.73 per share for the quarter. Analysts' estimates typically exclude special items.

Total revenues for the quarter climbed 33.6 percent to $335.45 million from $251.06 million in the same quarter last year. Wall Street expected revenues of $328.52 million for the quarter.

Same store sales increased 15.6 percent, compared to a 16.5 percent increase a year earlier.

Furniture and mattress sales surged 64.7 percent and accounted for about one-third of total product revenue in first quarter of fiscal 2015. Retail gross margin improved 110 basis points to 41.4 percent.

Total cost and expenses advanced to $286.42 million from $212.06 million in the preceding year.

Theodore Wright, chairman and chief executive officer of the company said, "We opened two Conn's HomePlus stores in Colorado in late April, two stores in Tennessee in May and plan to open seven more stores by the end of July...We incurred substantial costs related to these stores and the related distribution network during the quarter, which we expect to become better levered over the balance of the year."

For fiscal year 2015, Conn's still sees earnings to be in the range of $3.40 to $3.70 per share on an adjusted basis. Analysts project annual earnings per share of $3.52.

The company expects to generate earnings per share of between $3.37 and $3.67 for the 12 months ended January 31, 2015, which includes charges of about $0.03 per share associated with facility closures and lease terminations during the first quarter of fiscal 2015.

The firm anticipates annual same stores sales growth of 5 to 10 percent.

For the full fiscal year, the company continues to execute its plan to open 17 to 20 stores and expand its geographic footprint.

CONN is currently trading at $49.63, up $2.99 or 6.41 percent.