Conn's, Inc. (NASDAQ:CONN) Q2 2020 Earnings Conference Call Transcript

Sep 03, 2019 • 11:00 am ET

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Conn's, Inc. (NASDAQ:CONN) Q2 2020 Earnings Conference Call Transcript

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Presentation
Executive
Norman Miller

12 months. We expect the first Florida store to open in the second half of next fiscal year. Ultimately, we believe the state of Florida could support over 40 Conn's locations, which would represent a significant expansion to our current store base.

Our credit performance remains strong and is in line with the strategy we outlined over three years ago. With confidence in our underwriting and collections performance, our stable credit segment provides us with additional opportunities to grow retail sales and differentiate our business from other retailers. Reflecting our optimism for the future and our desire to create value for shareholders, I am pleased to announce that we have repurchased $57.9 million of common stock through August 29, which represents approximately 9.6% of our outstanding shares. As you can see, positive momentum is accelerating across our business and we believe fiscal year 2020 is shaping up to be a year of strong earnings and operational growth.

So with this overview, let me turn the call over to Lee, who will provide more details on our second quarter operating results.

Executive
Lee A. Wright

Thanks, Norm. The second quarter of fiscal year 2020 is the second best quarter of total retail sales growth in 13 quarters, despite the continued headwind of lapping the benefit of Hurricane Harvey rebuilding efforts had on our results last fiscal year. Although total same store sales decreased 2.3%, reflecting the continued impact of Hurricane Harvey, I am pleased to announce that total retail sales increased 3.3% for the second quarter of fiscal year 2020 and same-store sales were positive in non-Hurricane Harvey impacted markets, highlighting the power of our growth opportunity.

Year-to-date, we have opened 10 new showrooms in existing states, including two opened in August. We plan to open four additional locations in the third quarter. This will bring the total number of showrooms opened in fiscal year 2020 to 14, all within existing states, which reflects the highest number of new stores that we will have opened in four years. New stores continue to operate in line with our credit and retail expectations. As a result, we plan to open a greater number of showrooms next fiscal year, which includes several in Florida. With only 133 stores in 14 states, we are excited by the significant and long-term opportunity we have to expand our footprint.

Since coming to Conn's in July, Rodney Lastinger, our new President of Retail has quickly contributed to our success, helping to drive better retail execution both in our new stores and within our existing store base. Rodney's experience at Target Corporation, managing over $21 billion in sales, 85,000 team members and 565 stores provides Conn's with a proven leader who understands how to properly manage, scale and develop a large retail operation.

Same-store sales in non-Hurricane Harvey impacted markets increased 0.4%, primarily due to higher sales within our home appliance and furniture and mattress categories. In fact, total same-store sales of our home appliance category were up 3.4% during the second quarter