Conn's (Nasdaq: CONN) returns to a profit in 4th quarter

Palm Beach, FL 4/3/12 (StreetBeat) – Conn's Inc. (Nasdaq: CONN) returned to profitability in its fiscal fourth quarter, helped by higher prices, and lifted its earnings guidance for the upcoming year.

The company, whose stores sell home appliances, furniture, mattresses and other goods, said Tuesday that it earned $7.7 million, or 24 cents per share, for the three months ended Jan. 31. A year earlier it lost $3.6 million, or 12 cents per share.

Removing the cost of closing five of the chain's weaker stores, earnings were 34 cents per share in the most recent quarter. This topped the 29 cents per share that analysts surveyed by FactSet forecast.

Revenue rose 4 percent to $226.7 million from $218.7 million on higher average selling prices and better furniture and mattress sales, which Conn's said are among its more profitable products. Wall Street expected $221.4 million.

Revenue at stores open at least a year rose 12.1 percent. This figure is a key indicator of a retailer's health because it excludes results from stores recently opened or closed.

Conn's also said that its credit arm was more profitable as it set aside less money for bad debts and servicing costs fell. Conn's has financed about 61 percent of its own retail sales over the past three years. The in-store financing and rent-to-own payment plans that the company uses usually appeal to lower-income customers or customers who can't qualify for credit from traditional sources.

For the year, Conn's lost $3.7 million, or 12 cents per share. That compares with a loss of $1.1 million, or 4 cents per share, in year ended in January 2011. Annual revenue fell 2 percent to $792.3 million from $808.8 million.

Going forward, the Beaumont, Texas, company said it expects earnings in year ending in January 2013 of $1.20 to $1.30 per share, excluding one-time costs. It previously predicted earnings of $1.05 to $1.15 per share.

Analysts predict earnings of $1.11 per share for the fiscal year.

Conn's has 65 stores in Texas, Louisiana and Oklahoma.

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