April 3 Home appliances and electronics retailer
Conn's Inc reported fourth-quarter revenue above Wall
Street expectations, helped by higher demand for furniture and
mattresses, and raised its adjusted profit forecast for fiscal
The company's shares rose as much as 14 percent to a
life-high of $41.36 on the Nasdaq on Wednesday morning in heavy
trading. They were trading up 10 percent at $39.86 later in the
Conn's, known for offering flexible credit options to its
customers, has been increasing its focus on high-priced products
such as furniture and mattresses to boost
Margins on furniture and mattress sales rose 11.1 percentage
points to 46.7 percent in the quarter. Retail gross margin
increased 720 basis points to 36.9 percent.
"The 720 basis points increase is from a better mix shift
due to Conn's efforts to increase its focus in furniture or
mattress," David Magee of Suntrust Robinson Humphrey wrote in a
The company also benefited from five new Conn's HomePlus
stores, and it plans to open 10 to 12 more stores in fiscal
The company, which also sells lawn and garden products, now
expects to earn between $2.40 to $2.50 per share in fiscal 2014,
up from its previous expectations of between $2.05 and $2.15 per
Analysts were expecting earnings of $2.09 per share,
according to Thomson Reuters I/B/E/S.
"While we had anticipated a guidance increase, the magnitude
exceeded our expectations," Magee said.
Net income rose to $17.7 million, or 50 cents per share,
in the quarter ended Jan. 31, from $7.7 million, or 24 cents per
share, a year earlier.
Revenue at the company, which competes with Hhgregg Inc
and Home Depot Inc, rose 10 percent to $250.3
Analysts on average had expected earnings of 56 cents per
share on revenue of $246.9 million.