'Our third quarter results highlight the resilience of our unique hybrid retail and credit business model and the ability to de-risk our credit business while still supporting retail demand through our diverse credit offerings. As a result, we experienced another quarter of robust year-over-year growth of cash and third-party retail sales, which increased 32.7% over the prior fiscal year period and reflect strong demand for home-related products. We are also quickly expanding our digital and omnichannel capabilities to meet surging online trends and e-commerce sales increased nearly 61% during the quarter,' stated
'The performance of our credit segment throughout the COVID-19 crisis demonstrates the success of the adjustments we made earlier this year to mitigate the potential impacts on our business of high unemployment and economic uncertainty. While retail sales financed by our in-house credit offering declined 27.9% from the prior fiscal year, our credit segment is benefitting from newer, higher quality originations and the highest rate of cash collections in over ten fiscal years. In addition, the reduction in the portfolio balance, driven by strong cash collections and higher cash and third-party sales, has contributed to significant year-to-date and third quarter operating cash flow and strengthened our balance sheet.'
'Same store sales improved sequentially reflecting the progress we are making to capture retail sales opportunities while prudently managing credit risk. I am proud of our response to the unprecedented challenges we have faced throughout the COVID-19 pandemic and our continued commitment to protect the health and safety of our employees, customers, and communities. This is a testament to the experience of our senior leadership team, the dedication of our employees and the value our credit and retail products provide our communities. As we successfully navigate this difficult period, I remain confident in the direction we are headed,' concluded
Third Quarter Results
Net income for the three months ended
Retail Segment Third Quarter Results
Retail revenues were
For the three months ended
The following table presents net sales and changes in net sales by category:
Three Months EndedOctober 31 , Same Store
(dollars in thousands) 2020 % of Total 2019 % of Total Change % Change % Change
Furniture and mattress$ 82,793 31.9 %$ 89,070 31.8 %$ (6,277 ) (7.0 ) % (12.8 ) %
Home appliance 99,872 38.4 90,343 32.3 9,529 10.5 6.1
Consumer electronics 35,517 13.7 48,113 17.2 (12,596 ) (26.2 ) (29.3 )
Home office 16,711 6.4 18,681 6.7 (1,970 ) (10.5 ) (13.9 )
Other 4,264 1.6 4,026 1.4 238 5.9 19.8
Product sales 239,157 92.0 250,233 89.4 (11,076 ) (4.4 ) (8.7 )
Repair service agreement commissions (1) 17,465 6.7 26,478 9.5 (9,013 ) (34.0 ) (27.9 )
Service revenues 3,150 1.3 3,411 1.1 (261 ) (7.7 )
Total net sales$ 259,772 100.0 %$ 280,122 100.0 %$ (20,350 ) (7.3 ) % (10.9 ) %
(1) The total change in sales of repair service agreement commissions includes retrospective commissions, which are not reflected in the change in same store sales.
Credit Segment Third Quarter Results
Credit revenues were
Provision for bad debts was
Credit segment operating income was
Additional information on the credit portfolio and its performance may be found in the Customer Accounts Receivable Portfolio Statistics table included within this press release and in the Company's Form 10-Q for the quarter ended
Showroom and Facilities Update
The Company opened two new Conn's HomePlus showrooms during the third quarter of fiscal year 2021 and has opened one new Conn's HomePlus showrooms, its first in
Liquidity and Capital Resources
As of
Operating cash flow increased 316.6% year-over-year to
On
Conference Call Information
The Company will host a conference call on
Replay of the telephonic call can be accessed through
About
Furniture and mattress, including furniture and related accessories for the living room, dining room and bedroom, as well as both traditional and specialty mattresses;
Home appliance, including refrigerators, freezers, washers, dryers, dishwashers and ranges;
Consumer electronics, including LED, OLED, QLED, 4K Ultra HD, 8K and smart televisions, gaming products and home theater and portable audio equipment; and
Home office, including computers, printers and accessories.
Additionally,
This press release contains forward-looking statements within the meaning of the federal securities laws, including but not limited to, the Private Securities Litigation Reform Act of 1995, that involve risks and uncertainties. Such forward-looking statements include information concerning our future financial performance, business strategy, plans, goals and objectives. Statements containing the words 'anticipate,' 'believe,' 'could,' 'estimate,' 'expect,' 'intend,' 'may,' 'plan,' 'project,' 'should,' 'predict,' 'will,' 'potential,' or the negative of such terms or other similar expressions are generally forward-looking in nature and not historical facts. Such forward-looking statements are based on our current expectations. We can give no assurance that such statements will prove to be correct, and actual results may differ materially. A wide variety of potential risks, uncertainties, and other factors could materially affect our ability to achieve the results either expressed or implied by our forward-looking statements, including, but not limited to: general economic conditions impacting our customers or potential customers; our ability to execute periodic securitizations of future originated customer loans on favorable terms; our ability to continue existing customer financing programs or to offer new customer financing programs; changes in the delinquency status of our credit portfolio; unfavorable developments in ongoing litigation; increased regulatory oversight; higher than anticipated net charge-offs in the credit portfolio; the success of our planned opening of new stores; technological and market developments and sales trends for our major product offerings; our ability to manage effectively the selection of our major product offerings; our ability to protect against cyber-attacks or data security breaches and to protect the integrity and security of individually identifiable data of our customers and employees; our ability to fund our operations, capital expenditures, debt repayment and expansion from cash flows from operations, borrowings from our revolving credit facility, and proceeds from accessing debt or equity markets; the effects of epidemics or pandemics, including the COVID-19 outbreak; the impact of our previous restatement and correction of the Company's previously issued financial statements; the previously identified material weakness in the Company's internal control over financial reporting and the Company's ability to remediate that material weakness; the initiation of legal or regulatory proceedings with respect to the prior restatement and corrections; the adverse effects on the Company's business, results of operations, financial condition and stock price as a result of the previous restatement and correction process; and other risks detailed in Part I, Item 1A, Risk Factors, in our Annual Report on Form 10-K for the fiscal year ended
https://ir.conns.com/news-releases/news-release-details/conns-inc-reports-third-quarter-fiscal-year-2021-financial
(2) Represents impairments from exiting certain leases upon the relocation of three distribution centers into one facility and the gain from the sale of a cross-dock during the three and nine months ended
(3) Represents impairments of software costs for a loan management system that was abandoned during the third quarter of fiscal year 2020 related to the implementation of a new loan management system.
CONN-G
(C) 2020 Electronic News Publishing, source