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Conn's Inc. stock falls after sales miss, bleak outlook

The retailer's revenue earnings fell short of Street forecasts
Conn's storefront
New leadership at the specialty retailer has been reining in credit losses

Conn's Inc. (NASDAQ:CONN) topped fourth-quarter Wall Street estimates, but shares fell Thursday after the company missed on same-store-sales and provided a bleak outlook.

The stock shed 15.6% to US$30.27 in morning trade.

Return to full-year profitability

Net income for the quarter ended January 31 was US$3.2bln, or US$0.10 a share. Adjusted earnings for the Texas-based specialty retailer of home furnishings and consumer electronics came to US$0.56 per share, above the FactSet consensus of US$0.54.

Total revenue slipped to US$420.4mln from US$432.8mln, missing the FactSet consensus of US$429.9mln. The decrease in retail revenue was primarily driven by a drop in same-store sales of 8%. 

Conn's shares have been climbing in recent months after new leadership has been reining in credit losses. As a result, shares have climbed 1% since the beginning of the year and more than tripled in the last 12 months.

"Conn's fiscal year 2018 financial results demonstrate the successful execution of the company's turnaround strategies and a return to full-year profitability,” said Conn's CEO Norm Miller in a statement.

“Credit segment performance improved throughout the fiscal year as a result of higher finance charges, stronger portfolio fundamentals, controlled expenses, and lower borrowing costs,” he added.

The Texas-based specialty retailer which sells furniture, home furnishings and consumer electronics has 113 locations in 13 U.S. states.

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