Conn's, Inc. (NASDAQ:CONN) Q2 2021 Earnings Conference Call - Final Transcript
Sep 03, 2020 • 11:00 am ET
[Operator Instructions]. Our first question comes from Brian Nagel with Oppenheimer.
First of all, I'm going to give congratulations on managing the business really well through obviously a difficult time. Numbers speak for themselves. Congrats on that. The question I have, look, you spent a lot of time in the prepared comments just talking about your strategic decision to pull back on lending here, given the environment. Lee, you mentioned we expect the tighter lending standards to remain in place through the balance of the year. So maybe a few questions, beyond the obvious, I mean, are there specific indicators you're looking for that could lead you to, as a company to lessen these restrictions? And then secondly, is it an all or nothing? Or could you start to go market-by-market even recognizing there's different risk profiles in the categories you sell category by category within your stores?
Absolutely. I'll answer the second part first, which it is not all or nothing and although we anticipate being tighter from an underwriting standpoint, the back half of the year relative to last year, that does not necessarily mean at the 20% levels, which are really at that tight end -- at that type of an underwriting standpoint, Brian, that's tighter than any time the company's been in the last 10 years. I would not expect necessarily us to be at that level of tightening through the entire back half of this year.
We believe that there are opportunities both geographically and with different segments of customers to give us some opportunities to take appropriate risk going forward in the back half of the year. I guess the underlying message is we're being quite cautious as we go forward with unemployment still in double digits and unknown what's going to happen, having obviously never been through a pandemic we'd rather be a little more cautious here in the short-term and ensure that as we come out of it, our portfolio is in very strong shape. We believe because of the non con financing sales opportunities being up over 50% demonstrates that from a business model standpoint, we have an opportunity as long as we can keep our portfolio in very strong shape coming out of the pandemic to capture not only increased retail sales opportunities, but continue to benefit from a strong credit business as well.
Got it. And then maybe some -- just a couple of quick follow-ups, norm on that. So one, look, I mean, at least in my view, Conn's, to a certain extent, stands alone in what you do in the marketplace. But as you look out there, are competitors from a credit standpoint, doing something similar to Conn's? Or is there the chance that within certain niches of your market, you actually -- given how tight you are with lensing right now, you could be losing market share temporarily. Then the second one to that is -- I want to make sure I asked this correctly, but we