Conn's, Inc. (NASDAQ:CONN) Q2 2021 Earnings Conference Call - Final Transcript
Sep 03, 2020 • 11:00 am ET
talked about -- you have, as Lee just mentioned a second ago, the significant surge in sales that are not tied to your in-house credit. Is that serves mutually exclusive from what you're seeing with your credit? Or do you actually have customers that since they can't get your credit or are still buying a product in your stores using some other credit needs?
I'll answer the second part first. I don't think they're exclusive. I mean, with the increase on our third-party financing on the cash side and the Synchrony I think we're attracting both customers because of our full credit spectrum offering, we're attracting those customers, actually marketing to those customers, probably more than we have in the past. So I think there's opportunities and we expect coming out of the pandemic that our mix will skew higher than it was pre-pandemic on some of those alternative financing.
And what separates us at the end of the day, going to your first question, is the full credit spectrum offering that we have. There are others out there that obviously have Synchrony or high credit offerings or options for those prime customers or higher credit quality customers. And there are businesses out there, competitors out there that have lease-to-own as well. So there is competition on both of those ends. But as far as from a Conn's financing, 550 to 650 FICO that's still about 50% of the business. There's no one out there underwriting at our 29% APR for that credit quality customer currently in the marketplace that we're aware of.
And I would just add to that, Brian, from a consumer finance standpoint, what you're seeing in terms of our pull back on originations is not unique to us. There are a number of other consumer finance companies whose originations are down, up to 90% for the second quarter. So it's not a Conn's phenomenon. This is something that you can see across the industry.
I appreciate that color.
One other thing I'll add up, Brian, I'd say is we are seeing more opportunities as higher credit finance or banks and other options are tightening from a higher credit quality. We are seeing the opportunities at our higher-end of the credit spectrum to -- that we think will create opportunities for us going forward as credit tightens across the entire spectrum, not just from us, but from everyone along the higher credit spectrum.
Our next question comes from Rick Nelson with Stephens.
Like to ask about sales trends as the quarter progressed and what you're seeing in that current quarter-to-date?
Yes. Rick, it's Lee, So clearly, we saw a little bit of a deceleration as we went through the quarter. And as we saw some of the government stimulus that wane with the Cares Act being ended at the end of July, clearly, we're not giving guidance on the go forward, as we said in our press release. But we don't expect anything in particular to change