CONN - Earnings call transcript Q4 2018

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Operator

Good morning and thank you for holding. Welcome to the Conn's, Incorporated Conference Call to discuss earnings for the Fiscal Quarter Ended January 31, 2018. My name is Krystal and I will be your operator today.

During the presentation, all participants will be in a listen-only mode. After the speakers’ remarks, you will be invited to participate in the question-and-answer session.

conference being this [Operator reminder, a call recorded is Instructions]. As Investor X, earnings be before Company's at release Company's XXXX accessed Web ir.conns.com. dated the can The morning April distributed site this market via Relations opened must made this statements the of call of laws. within in federal statements remind securities you forward-looking I some meaning these that are forward-looking events. statements concerning beliefs future represent These the or Company's present expectations could certain cause that such results and statements assumptions, on which cautions based risks today. are Company materially The uncertainties, differ necessarily which actual to indicated from to subject are those

CEO today Lee would speakers are the Mr. Your Norm to sir. Miller, go like the I conference the Company's CFO. Please over to Miller. and Company's call turn Wright, now ahead

Norm Miller

and important growth in that was our profitability return our strategies an taken performance. our that platform an to financial has supports corporate full-year report The built of I'll then during with our this comments better segment opportunity. conference put turnaround has fiscal pricing a pleased long-term a am year on Good progress And clear significant prepared to while performance, evolution at complete and have demonstrates Conn's to execute morning. the financial XXXX XXXX begin overview structure milestone and creating call towards quarter credit credit platform even call. made with risk, results. which Lee appropriate an the strategies will remarks proactively our our on strong with that financial welcome year hold. to manages on additional fourth also we the prudently earnings improving Conn's aimed I path fiscal a

I’ll opportunities and the growth as strategies finish for future us credit to of about XXXX when the segment our I'll of been front prior many much footing compared ended fiscal grow profitability capability to sustainable several the retail some Conn’s performance. we encouraged $XXX charges, I prepared by and loss We year on the our is headed in we credit will leverage reviewing Conn's before fiscal our stronger direction the year that my the controlled am past year contributed lower talking an my important comments support million. growth, nearly on opportunities. segment. update segment in segment. creating the portfolio improvement to have credit the shareholders. of a lost fundamentals, retail retail finance value to costs, long-term start over have $XX.X stronger And Higher borrowing focus improved with on million expenses this remarks by an all underway from

As started fiscal in to a we of year yield middle enhance reminder, XXXX. the our programs implementing

current quarter third of fiscal compared enhance weighted was at the XXXX originations which all During The for was year quarter XXXX, were we to during made XX% to interest the average second XX.X% of year improve yield. of approximately originations of the to fourth year and quarter quarter programs before fiscal started of XX.X% XXXX, rate. yield, our programs fiscal fourth higher the rate completed we

fees over of January balance have the while XXXX, approximately our $XX.X XX, into the benefits and programs portfolio these for increased declined interest ending same the months income, As million seasoned has average three to time. X.X% have portfolio, XX.X% the

of interest past $XX.X as income XX and of million result Conn’s successfully increasing added yield. the Over fees months, a

improvement XXX of We our quarter credit net XX, increase XX.X%, net having their quarter from segment. a can As point basis producing to interest are the on and fourth year improving XXXX. the results the ending are performance programs fees of income record with of and powerful see, ended fiscal impact you January a intended yield representing XXXX

yield net towards move as favorable will achieving trends and of between XX%. our our XX% portfolio seasons we expect and expectation continue a We of

performance trends. strengthening receivable at Looking quarter the show portfolio, fourth to continue our results of

day historically prior rate have performance. year Conn’s the improving indicator second consecutive period, leading has that quality. declined representing metrics a XX also credit the discussed days quarter basis for XX rate approximately declined. as in using this are from account demonstrating XX a Other points We improvements delinquency rate

increase First to The improve pay prior first default to corresponding August, only where past XX the the in was impact quarter the X.XX% months year trends lower quarter is which rate to compared continue the the prior payment Harvey. XX improved has fourth year. experienced hurricane the period. in pay and consecutive of we The of during months, reflects the defaults This period payment is Conn’s an in rate increased rate year-over-year. to XX was from points sixth the and basis also up compared where

As you Houston largest of know, market. is many Conn’s

hurricane destructive the took toll While Harvey the quickly region, economy has across a local rebounded.

rebuilding tens last has year, thousands created result the a calendar the During months the three and the efforts, economy. in prices oil with combined jobs pro-business a which of of improving of local of Houston as environment helped new were

XXXX, growth. in employment its In growth strong the Texas State of addition, annual XXrd month throughout consecutive experienced January state remained the and of employment

losses. believe continue our hurricane with allowance that to increase associated the quarter the provisions the in was in for We storm’s adequately third recorded the expected

put performance credit results and momentum loss today of we our rates risk. current quarter our transformation remain believe we manage growing in benefiting place to programs the are years credit show, and that we accounts strategies XX%. appropriately current we underwriting our credit at XX% The are that past in approximately two have fourth over As confident reflected trends

approximately fiscal year these half the loss six effect to tighter further improvement. of Looking we rate changes the late anticipate first underwriting year January X% first XX, of and of early originated And in portfolio the fiscal is the even of the the at made years past year origination XXXX under for The originated and year-over-year XX.X% accounts cumulative to originations half in half as expected loss quarter first of for of originations underwriting second XXXX took XXXX. accounts from represents year benefit in in of decline are loss was year standards. trends, of for the fiscal cumulative indications fiscal XXXX's after fiscal compared accounted portfolio performance XXXX Originations better. continued XX% second the XXXX year for

yields represents year will continued performance. originations first guidance the year's improving better decline improving quarter from benefit expect portfolio new we Our results continue overall a from provision of fiscal and prior for credit credit and our performance. reflects Throughout trends to higher and spread XXXX,

credit have achieving towards with path points our basis a a We objective. strong clear spread platform XXXX

final to with in spread regulatory cost. well of hurricane segments contribution financial the navigate in trends this with insurance the the the events like component as successfully reduction borrowing the unexpected ever credit has and stated transformation flexibility combined credit changing performance. we to significant past, as Harvey, As maximizing our been provides income Conn's our while The economic,

reduced XX improvements expense nearly interest even past positive the from million improved successfully results by and We funds. Conn’s interest in cost continue further. lower XX% $XX.X of our will ABS its of months, as and financial annual Over spread credit a widens Conn's result ABS significant anticipate debt has or outstanding as investors

expense. improve lowest his transaction all represents since the reentered reducing in review our ABS direction the prepared and total have highest taken latest on market. our rate the achieved advanced the fiscal continue have improving business. will and will has segment funds remarks, transformed the our and year cash ABS to strategies Credit company leverage, Conn’s lowering Throughout of in we focus cost interest demonstrate flow Conn’s results that hold of performance to XXXX, As

with as we months, XX a bad $XX.X past million, million primarily in path loss $XX.X the have are XX.X% increase the is towards Over run by credit $XX.X provision portfolio debt credit from reduced The on and million in better and charges expense. the higher in other interest result finance underwriting million a even performance standards of clear segment reduction as accounts or reduction benefiting segment and off tighter $XX.X the legacy yields. for revenues, an from and financial replaced accounts a

and sales. sales. direction opportunity. throughout year overview, so With retail at why is by unplanned built fiscal compelling in encouraged planned look credit this despite opportunity retail to fiscal underwriting, affecting XXXX are slowed our let's growth a excited performance We platform review segment of and XXXX which we our to about we retail have support the year proactively Fiscal and year headed for the strong by our Conn's retail changes retail were XXXX tremendous the performance items was number impacted sales. grow are sales

new to the In part immigration border transition store openings certain our the in nation’s which impacted addition, in sales. the caused our limited policy, out by regarding southern challenges and statements markets also Mexican were we believe coming in of partner, and own Texas, along of capital the lease

in represented Sales sales last we each year, AcceptanceNOW the Conn's market partners. alternative fiscal integration our category. announced strong to former store same I our the XXXX X.X% lease partner. higher in decline fourth the total tried which caused of continued were in the continued new execution, started sales same-store business are quarter experiencing quarter. though in grown sales the from TV fiscal the category are sales We we lap items pleased the Progressive own own experienced As due lease year previously they Since quarter we and average the Conn’s explored the to growth sales of transition we already our we of to during through retail to mattress transition AcceptanceNOW full Progressive the and challenging XXX expected, several was of keep Even offering and within Progressive. as while quarter, historic in included transition additional fourth fourth with have of to May X% program decline Progressive to points as our am sales improved. our with quarter basis fourth conditions to down, Approximately vendor with experience than

categories, which ended retail favorable with and record segment continue from higher gross Turning focus on improve to to to mix retail our profitability. product benefit efficiencies. margins margins, performance initiatives the within and Conn’s product year

throughout fiscal magnitude to mattress past period. basis grow, to points do XX.X% It experienced fourth XXXX, we year fiscal quarter while retail and not note as our to is important year. this the to think growth fiscal retail margin margins, from we mix that will the expectations have the and For opportunities however gross our of furniture retail expect continues year of prior there margins gross more Company the are increased expand gross of exceeded especially XXX

store in this X% to same down first our we to be expect release morning, shown As quarter press sales X%.

We performance, reflect with ongoing stronger sales store which February in improvement our the and trends. pleased March sales same are

XX% down year-over-year headwind points the basis lease in February, as component February this of store February to own XXX X.X% month the of was year The at lease last from this X.X%. sales largest transition in were compared of year. For of to sales own our peaked same decline to

In certain addition, February border sales of in the as as TV Texas were the challenging markets still along softness well category. by Southern by impacted part in Mexican

For the as transition year-over-year lease same own sales month March, last down lease of our in in X.X% to of partially X.X%, the own due X.X% year March headwind XXX March to were from of basis to this point to sales were compared store year.

by were softness In category. impacted the continued addition, TV March within sales

a a with compelling to combines and to this the options. preposition replicate footprint, offering grow and a Conn's offering is are our hard a retail unmatched Conn's product profitably model of opportunity another company with geographic and the to overview, traditional provides So segment grow sales experience and retailer of retail through that retail national at become online we look going differentiated quality financing retail or retailer. unaware forward. multiple business combining our let's some Conn's has significant opportunities value credit

our out for year our took for fiscal converting grow out financing stores applications of XX or visits by more to to that XXX,XXX one one to approved our fill remaining interacting the and one Web compelling visiting retail time online. with retail to unable these XXXX our is locations, application us of funnel already credit. X.X or million This the in-house of unique the During of qualify option. Conn's of We approximately million with over of site people traffic sales XXX,XXX approximately sales creates a an

say with we how yes credit of customers of We are or are their focused the we and connect used for more on how applicants saying to that two key approved do currently to to potential credit. do no apply more we strategies

start Let's underwriting. with

primarily was strategies sophisticated focused past Over the to implementing team year, credit losses. a our credit and building reduce on platform

future applicants Officer actively which incremental As Conn's year. to to our declined the finding the performance and increasing their additional and expect sales company's credit has in sales find his credit the applications produce and without are modeling evolve now to tenures team’s experience focus can Davis, and incremental Chief will we customers, increased within segment last John opportunities Credit XXX,XXX risk. team, improve, continues analyzing credit quarters fiscal

and In provides well committed a customers. own our partner fully addition having integrated to for capitalized additional options lease payment

relationship to lease with ongoing overtime of Progressive our own continues As deepen, sales on to at XX% an grow sales product expect to to we least basis.

a want, The on they approved XXX,XXX at they offering enhancing creating the XXX,XXX viability not their retailer. of than credit used price is an that majority for, grow environment to sales XXX,XXX the critical the inviting we in-house it applications used line our credit want almost success our this and focused execution. customers and provide other the they what to and year, for approved fair of of approved key that strategy what were retail our of to did as past less when retail credit use customers any any half Of of

addition, easier level will In exceptional training interact include are underway a an us. believe strong with for multiple we associate enhancing of a customer it These with loyalty merchandising purchases. have offering our impact relationship market, making customers customer additional our radiates connection programs builds that drives strategy, There strong and in and promotes that to improving our optimizing customers. service

retail hired of growth we to drive growth. and execution, is single-digit The VP amongst strategies Experience We our final believe loyalty drive preference, sales are our a many which Customer our also recently can low implementing of These retail to are expansion. piece improve we ultimately of customers. some same-store the advocacy strategy

to opening locations year. developed this We new have includes five that fiscal growth a new store plan nine

costs. All current lending in our benefit higher rates that by of these and to stores Conn's will warehousing our allowing leverage are be supported from existing infrastructure, states fixed

the the resiliency to implemented flexibility quarter Today, unexpected plan retail and have that we clearly demonstrate results Marco's, growth Texas. expansion. Conn's with can platform Company San successfully the During plus remarks, quarter year have that while created platform years hold. opened We conclude expansion, while we our fourth XXXX, enhanced fiscal of growth the two my supporting the locations we believe first and Killeen controlled already in risk manage retail a past two prepared the turnaround ability credit strategies like has the taken has with over develop hurricane provides proactive and aimed to plan events the profitable strong navigate providing Company Harvey. at and To successfully

sell critical experienced which depends the on platform we leadership success stores. leadership our of Conn's differentiated our Our more unique the and assembled. just and business we requires a have A has component products complex model, team than strong in team. is the

Overall, direct to accomplishment. success organizations, experienced associates all team managing XX a of result consumer motivated great and I'd like across commitment Our who thank hard have to opportunity is and experience, represents states their and them are our work retail use as proven national foundation companies. more their both as finance the daily The leaders for and our our for company. well guidance representing turnaround future this this we X,XXX of is than of

headed our have and undergone and entire We opportunities Board direction the am business. everyone's about to I this, team, the the behalf speaking over extremely transformation, Conn's we significant Lee. on let of to me of work. and we have hard a is leadership excited Directors appreciate the call turn compelling grow the With

Lee Wright

a the $X.XX share fiscal diluted the Adjusted a $XX,XXX per fiscal XXXX. per loss per Conn’s the in net third of And share share net available income loss reflects represents reconciliation credits. versus quarter XXXX XXXX in year. cut diluted and XXXX, year Thanks last the diluted results $X.X a compared for last was significantly of or profitability. to per basis, prior $X.XX same net income year of our result compared fourth tax and million year. adjusted fourth to of share was year quarter fiscal quarter. of $X.XX fiscal On This quarter fourth for for share of achieved charges our GAAP same XXXX a fiscal the decreased $XX.X for and revenues or $X.XX fourth income A period to of million fiscal in charge release morning. of that non-GAAP to a $X.XX diluted non-GAAP year Norm. jobs the quarter X.X% other income improved this of per as act $X.XX Net the approximately per consecutive million is press GAAP $XXX.X year quarter Consolidated issued share for period of for year fiscal

forward, to XX% between XX% act will reduce an jobs and historically. XX% to and approximate compared approximately rate the cut tax and tax Conn’s Going effective XX% rate

expenditures XXX% the jobs addition, deduction and declined capital many have quarter lower act which $XXX.X will an a retail quarter a will our the taxes. year positive tax result be the Fourth were larger same fiscal rates, In cash revenues the Company's tax million, customers ago. for of lower million deductible, tax standard both a XXXX and $XX.X believe as increase in We of impact credit. a child year will X.X% which also or of from cut

fiscal XXXX, referenced quarter X% sales impacted the earlier down same-store were Norm of by For call. were year in the fourth the factors

impacted store the same quarter approximately For Harvey sales sales gross hurricane record for margin or the due same-store margin in year margins fourth a up revenues efficiency. the favorable percentage XX.X%. gross retail same down were all the a The markets as and product categories, primarily quarter X.X% outside of lower quarterly basis of hurricane by product product continued by retail were improved is impacted of increasing fourth mix across fiscal approximately XXX XXXX, and in expanded by to year-over-year on sales, the focus the quarter Despite fiscal markets while year year to from improvement points prior XX.X%. XXXX

are gross over As at from points mattresses the and of mattress XXXX represented believe expect furniture retail XXXX sales. Conn’s XX.X% represented fourth Norm we opportunities improve we mix product past not the stated, more quarter margin gross our to year mattresses this there of sales sales fiscal category The The same and higher fourth time, when margins XX.X% do XXX grow sales fiscal will year. while margin magnitude the experienced retail pace increased of basis and of and quarter fiscal of of and year our furniture retail gross XX.X% profit. of percentage product from since furniture product

We of quarter quarter fiscal XX% of mattress dollars of fourth and furniture increased a Retail the sales continue in retail the versus XX.X%. the due from to while basis as categories achievable. deleveraged fiscal prior believe X.X% product last longer-term from in is year XXX the retail goal the sales SG&A sales same lower SG&A percentage same points quarter to the to year, by

increased deleveraged year our on Although, to compared stores. million the spend a percentage absolute $X.X prior by with additional only even fiscal we basis, SG&A

stores prepare focused certain will new locations. starting fiscal associated six expenses. remained we months strategies five typically Conn's expenses on are opening to to stores approximately this open needed control SG&A cost these there as planned to be We We with additional with ahead and new nine of year,

to SG&A dollar as expenses, our enhancements successfully in remind at we sales as to manage ability our with well future everyone to on included percentage to release. the platforms guidance stores our I'd Company in our like press making along business to SG&A ensure analyzing the growth. However, continue of be new trends, the look When will investments

segment. the up decline quarterly X.X% to finance now revenues offset was points of in XXXX, of decline portfolio in an partially a last XX to despite credit record year increase quarter yield period $XX.X year Turning basis other year, million from fourth insurance by reported basis, versus XX.X%, from average fiscal of XXX charges the XX.X% last and the a % same of our due balance. an The commissions. year for last as record On were increase

an last the prior retrospective higher volumes of to benefit over claim placed to on Harvey. declined commission credit a Conn's discussed balances. decrease in as the incurred impacted efforts, our in due As are Provision previously, as credit claim year. The collections the additional the was to portfolio quarter XXXX, the primarily customer result to the and credit balance for accounts. year. portfolio several credit average higher It fiscal the of performance increase $XX.X same to and decrease offset segment commissions. million charged-off last was hurricane in underwriting expected, by in partially lower drive for X.X% fourth of fiscal debts we expenses continue to income resources last in increase of the segment fiscal a to from growth have in expected fourth expense X.X% from as SG&A same period, credit compared the the provision year recoveries And legal percentage to SG&A investments the decrease net is by increased continue improved retrospective to primarily year segment segment quarters TDR into our credit SG&A legal the XX.X% team. bankruptcy higher X.X% to in a compared attributable quarter as annualized, for to primarily versus in year. fiscal for which insurance related improvements made same charge-offs, and insurance also will bad the was the result portfolio take prior period the for the period of we lower quarter was quality analytic year of $XX.X million the we The and of

debt for allowance hurricane to future Harvey. Conn's for adequately continue losses bad the with and We associated reserves believe provision

available revolving XX, capacity had in cash of credit $X.X our borrowing and under As immediately facility. $XXX million million of XXXX, we January approximately

increases borrowing had in $XXX Additionally, that inventory base. could under available the we upon receivable and become balances million eligible customer

with securitization. I $XXX.X XXth a XXXX new line notes am the Our in extremely December pleased closing ABS our million with are expectations, of and performing

of This Class where advanced transaction, reentering the market transaction transaction since highest and since With of A, approximately XXXX. is issuance of initial all-in consecutive lowest Company notes, B achieved C cost, approximately the to and in notes funds, the can three currently rate also the cost XX.X% is the was the demand. has concurrent second Conn's securitization The cost the all of reflecting X.X%, experienced reentering ABS market. strong the has issue all-in investor Conn's including classes representing the

addition, In this improvement XX previous points basis our since was transaction.

first warehouse year the During three XXXX to classes A redeem the note. facility fiscal XXXX of B Conn's balances Class and B XXXX, outstanding uses all ABS quarter of outstanding our include B XXXX currently our our notes notes.

quarterly where of funds. cost interest the has the fiscal XXXX, two and year This declined reductions of XX the all-in or sequentially as quarter our past million. expense our interest million anticipate expense same in quarters consecutive quarter is $X.X year period lowest ABS decreased to continued fourth During expense Interest we last in the and fourth a result XX.X% transactions. to completing up from for $XX deleveraging

the since back call to Conn's our position years to Conn's two annualized as capital ago. Norm was Average this net our over third for strongest leadership had to continues a period approximately interest approximately as capital prepared came and to portfolio Company to to its for same year I'll the has X.X% turn the position was a X.X% new of remarks. year. last balance, the portfolio period ago. For debt, XX.X% percentage conclude team percentage the compared quarter, this balance, With same expense improve XX.X% compared average overview, is of a average

Norm Miller

over and plus years, model have understanding two demonstrate Thanks lot in of results Lee. I patience the and business Fourth our occurred quarter transformation period. our been that a and has improvements momentum accelerating. transformative to taken our that past this There business everyone's hold have the appreciate is during

to strong, and for is successfully our infrastructure headed of we questions. to differentiated our We am proactively I operator, associates up retail our are continues excited well that, value shareholders. the focus credit created to our while the risk. positioned have business growth, customers, create long-term even as please to that we direction more about manage our a profitable open credit With driving enhanced call shift and

Operator

question first our Brian And Instructions] Oppenheimer. [Operator from comes Nagel from

open. line is Your

Brian Nagel

questions, I side business. my to on retail want of just So the the focus

from So laid is if comments fiscal me we of months first factor start helping longer to comp first a we at, that. getting could any just timing there into particular Maybe about the the to to retail improving out the that's want out with, single you Thank second laid from digit you’ve take initiatives a should faster? you with you. And perspective, initiatives again getting that? drive here QX hold are will certain term think of talked all first of wait trajectory How improves, this about growth. we that And type low you've start if out, it to QX. drive prepared nice couple then there

Norm Miller

that the out April. of about the from the fourth same sales in have is has points been mattress And guidance driven couple a X% on factors. we One that really in different mentioned, April, that conversion as earnings And basis progression I which month we XX of you saw release at a impact quarter, early an range by in in it feel In was same the that April, points. about quarter, in down the basis lease now slightly it's store biggest in of improvement at the the laid down for X.X% of at and on that confident February X.X%. Brian, as the here month in the store I down, gave call, with the first implies X% X% middle February, decline the to own fourth net-net actually XXX first we about at the was sales. In to quarter gap. The favorable. March was

have own month estimate confident won't be So as that we flat And have consumer net-net the full April of to for points. It implied there. year. immigration that the quarter the There for to is we the store number we X% lapped made transition XXX the we range, with first basis will the that basically that first quarter, and somewhere time, headwinds the then feel between quarter since in we’ve the And year-over-year. lease in will pretty first it’s guidance saw stuff sales X% XXX last at. same again, quarter get and we to presented we where

over almost script without pressure I talked is the in know from nationally. you that business. Brian, significantly And unlike TV about retailers under the other It’s other any you exclusively standpoint, mention some category as to the our category The a know, newness as will years, headwinds piece that XX% electronics of TV. is last the was we two

on that was fourth basis points quarter couple about XXX be same We hundred quarter. first looking impact points. estimate We’re the in the that to a that basis in

your funnel, on million it’s or on opportunities. the XX want bullish whether we we store also our drive that credit. place people mentioned, submitted of layout are about script, opportunities quantify Web have for to site the and that to in-house to there that the try why significant X.X strategies to million to with we almost and million deck in an in question clearly so over we even But that. existing have, XX the those our traffic are, only our And second Now, application try traffic we our our our came of in or Web to site stores the investor in have actually some within is XX we’re visited as out do to Slide in

weren’t that approved, actually alone, those a applications, to another increases and able the the so customers, we’re out we yes that past of actually -- if and XX million them we bucket finding then out that that's invested over by probably that over leverage; drive because sophistication yes visits sources, XXX,XXX data few if to opportunity be past, And saying have, lack just alternative we’re the are one, X% our the total in to. the applications So And the years we've model should no. of just X% a declined because saying by we credit we we I the in just sophistication, declined. short-term more my that’s degree. XXX,XXX the decline to little But to third, applications biggest X% it, the over that infrastructure credit in or using, at saying about that when to X% look XX%. get script underwriting I of able as customers XXX,XXX segment submitted mentioned XXX,XXX our out our more team, that of talk And good of were you X.X in number that they’re more million

quantify approved on mentioned of that's if approved We we portion on that then improvement the underwriting ability process up. from comfortable each as significant credit And used them then a X% in we towards average, capability XXX,XXX team comfortable repay own the lease XX%, opportunity there. it us some On XXX,XXX the obviously we're an that that we're usage again, we us. that the sales the Progressive just that because XX% again, that the have just balance underwriting decline, we’re they same-store their element we X.X% customer, out for of that to a credit. drive sales was that positive every sales And as point. get And able standpoint, were X% have and about to And funnel. of from the to to individual we've moving believe plus doing done limit

and those piece getting just the able be credit, opportunity number about a is of of just we that and we that. sales store not same-store And in that. having And that have is, that had number did background, afford for or their bucket. And with down because it and and drive credit that the customers from any have X% clearly X% couldn’t were with. may that -- so into that's XXX,XXX XX% those And their significant drive XX%, in a shop rate that's we they that the payments use communication we have the if of XX%, are So so of the of people of approved retail online, are to they to a execution -- us. strategies to other to worth and in utilization element them place XX% multiple us to part several that then

approved, Although, payment. afford the couldn’t down they they were

of But them hurdle offering pocket purchase. financing. XX% not the that out to a that that's rate again So $XX XX% only move to to it execution a to customer have retail cash of Progressive down, that may potentially the higher clearly do overcomes that's that

But about I year. year in that here very the So to coming low prospects the in lot sales that's drive existing and within wanted the getting bullish we know 'XX our are balance there of of so I information. really that's highlight was the what a of to feel try to traffic see opportunities single-digits to many stores fiscal we

Operator

Markets. next from Thank Capital you. Brad KeyBanc question And from Thomas comes our

line Your is open.

Brad Thomas

own for I lapped for an maybe sales, and same-store zoom could on in outlook comparison on cadence It to the bit a to you and year. last good maybe to me wanted this there. as business very that month easy about be seems of the the Brian's you rent such follow-up question April

business to should I your guess that hoping And part to think so Conn's was about your sales get we I how just contributes perspective overall. the how on

if now, sales? is X% tail in were period Is closer same could sales points that think for element we be tracking month a of it or an really other to you are be Should wind you as there where should basis how lapping it store have XXX that? sales, where we about substitute of additive a thinking where range two. So you you're to a the

Norm Miller

again, script, of overall into we're there. as the I And can some year X.X the in we'll today from months this and sit very Progressive quarter, of with standpoint second the fiscal several to to even trade-off talked early an month that and Conn's have the suffice lease But own. to nice is here is that between Brad, the I of there element trade-off as there in tailwinds a before, financing some from April say the sales here and range by Progressive. mentioned end at ultimately ended we company last in that over we XX% as confident a X% still balance feel get

Brad Thomas

one And XQ store versus are and in about on then and Harvey of of non-Harvey balance the outlook thinking takes the sales. puts through the markets for at markets affected How the year? looking here the same other the you

Norm Miller

over seeing that that up down X.X%, that we're several last significantly the a in been they X% see little And and narrowing March hurricane just were continued non-Harvey months since the month narrow. we’ve at to were the smallest a markets mean, the and it’s of five. gap the is the bit, there I Harvey that gap

because we quarter are of impacted impacted in core of by very, the seeing hurricanes the through in Harvey economy; tailwind script, largest one our as expectation rebounding; even we mentioned a but getting our impact and here here; and not and So is the overall close of I of positive seeing market trends narrowing not and hurricane; by -- the stores the areas there oil the because our market for are very Houston, in market, now quarter in gas that the we probably the end another. see second economy; the first in

Brad Thomas

item devise your from and quarter. insurance income us the line provide the can the commented about insurance line And the line and item, affected I for how for you if it. then with Lee once charges, the have you numbers finance in XQ those? XXK interest other item we commissions the commission can it the that fourth get But on the we finance know income you

Lee Wright

$X income biggest again is, the that call. which XX% I over quarter in down as referenced was was the referencing is for I you're over million the insurance quarter what a period, mean, the one down

big had on us that a at So our we looked as obviously income. impact

Brad Thomas

And million or that $XX year… last was what so around

Lee Wright

going That's exactly million. $X.X right. down was to million It $XX.X

Brad Thomas

that And headwind how to for a are Will to you? out expecting in XQ? play continue you be that

Lee Wright

that's we Harvey all we the income any until entire refill and to incurred for again. we'll going It's be the the that start claims basically a to on headwind something recognize bucket then year, almost honestly

So going see basically but something work to help it’s may some entire of off year. the the just it's have to most QX take going We we're us to year. in

Brad Thomas

if And you talking in way perspective, yield had forecasted. what that you're the perspective, that are a you guys seeing from that happy with that’s a from out, Is yield right? adjust you

Lee Wright

and always we the improvement to we’ve the then four And others as states direct Yes, the yield continued of at XX% the and the now got question portfolio. a it our with we’re and time we cap, math of as about in higher and run just states of happy our talk as rate. of it’s rates through very states rolls raised some loan all

feel a to the we’re going in talked path goal yield to see there. we’re deck. get XX% investor very about to getting we on comfortable so And to that Again, XX%, that just we our increased continue as

Operator

from you. Stephens. Thank And Nelson our Rick of question comes next

open. is line Your

Unidentified Analyst

on but going to for I’m Wrangler] credit slowly here side to jump speak [Nick it in I’ll SXX on the Rick here. here. the down, vintage. focusing get just

stag lifecycle, lock now So look over loss their XX.X% the at to charged If of X% in vintages of have to the another take I a their the to remainder get up terminal the the at off. same lifecycle receivables X% they point rate two prior projection.

And so right the SXX XX%. over projection now

get the or vintages up loss whereas XX.X% up walked another rate locks up two walked another this So let's again, that that last like like to spot. X.X% call from terminal originations X.X%

walk vintage, to I confidence what question SXX continue help can the current at see what up basically you can upper is what current which XX%. walk your So the guide and does the guide? that that me the And it is, to look I bridge to do over see

Norm Miller

between it’s out dramatic we talked ’XX, we the But you don't reason of the what as or fiscal about back difference a and second the the of Part half broke versus ’XX of if of in a not. know half half. fiscal I year Nick scripts the loss first half that first work caught year

not those dollars aboard a XX% of to have and on ’XX fourth second the the since we reason we but that from the But much benefit that the before year-over-year and the quarter upfront on see we at. comment, number the portfolio is of what the about pay of the longer a the with going those the put basis. will static bring ultimately is with will worth Then on And than a dollars. new what loss in recoveries can of confidence piece back and XXX% fundamental the that gives up from first a scorecard return has recovery back quarter, recovery it we our credit second SG&A confidence half bankruptcy it legal the we of contingent all in in performance better when higher numbers us put also year plus the credit you recoveries. be. was of tune loss so half the to ’XX granted year The rates over We had standpoint, is ’XX much, script. for fiscal talked half, almost is the that across they impact place. where in high the them recoveries a level second is ultimately base up talked of performance one rates just with piece help rate. place and drives about Now, to is direct or the is on us being fiscal there X% in the as the you well natural investment strategies your of But It’s some to there the the have in with will is the back come agencies up static of

Unidentified Analyst

vintage and charged up then our has guess X.X%. at that this in from got thus there, first XX vintage the improvement then data the piece X.X% time represents prior I And we our, far

by about Just you that XX% that But to expecting are that that are a early is curious or number that's clean that good inflated going on were that that XX%. think up Is indicator? and you obviously feel confident and you X.X%. to walk Is number -- number? anything, you the

Norm Miller

year change number. the good a do accounted from a about for we an is the bankruptcies. way standpoint just It We because from elevated, ago standpoint, accounting bankruptcy feel slightly we

like having to it would -- more payment up that, X.X% as to with XX opposed X% have prior default But been it's So comfortable the years. first said in the and default year other we payment apples-to-apples pleased the of now portfolio XX months of very with 'XX. very, out XX the lower and have strength delinquencies, first the fiscal with year-over-year day quality very

Unidentified Analyst

charge-offs the associated Is static you me, loss in still rate the goals? do reflected goes, with do Can remind hurricane. incorporate they those that incremental

Norm Miller

third mean, -- put the since it's the our provision we not we million in in in adjusted we into loss that included on for projected have provision loss provisions incorporated quarter, fourth throughout And is that's the I subjected place $X.X rate. quarter.

Unidentified Analyst

on just guess touch I to missed Can then if basis up I on re-age, you re-age on and represents that can much. points customers how the to finally I if But Hurricane? sorry XX there? details remind And Thank is remind just balance us can you picked any re-age XXX, it. also the what the bucket? percentage very And then of leave about and exit increase

Norm Miller

a stay Well, the customer. it, answer at question re-age as to bucket. your identified last any They point the in Once as re-age you first. you don’t leave re-age

the fourth the from was and you quarter third Harvey. majority significant that hurricane was saw the because that of the quarter uptick So vast

don’t and will than we do those better that or their them the is they that have re-aging loan, charge-off, of are they performing re-age on which years want in Now, their loan as or until the buckets but since actually portfolio good to paid-off. until stay paying the two they rest clearly customers left

So re-age from you'll see seasons, now. until their charge-off I numbers the at fully years an mean hurricane which percentage could Harvey number elevated until -- be two

Operator

Baugh John from our And comes you. from Thank next question Stifel.

Your line is open.

John Baugh

if think your X%. right. I and average about, ask think up the the portfolio I your customer And months math to year-over-year, want weighted accounts was X% did did about I origination down in active is approximately I

factors that's put we which significantly I'm at there. just in got two the down playing together, fewer curious does of reflected I'm one I if I to in, coming trying that to Obviously, that of somewhat is know applicants just that imply guess So customers get is we as comp percentage dynamic. the the approval year-over-year, number. those factor.

Lee Wright

through. that and and walk the this seeing customers that's store restricted a of existing as and the a key we lower again, on Obviously, sales we And obviously, the focused us. slight that the have same you said we we retail from flows that here balance let's of one overall down as we're a same uptick And we on time to stabilized which credit mentioned all customers. sales as as really surprising growth with those But about things are of is underwriting perspective. talked side spent a really of number side, lot get in call, store the time the you but nothing obviously people through then factor that

John Baugh

you to one done, terms it And is what and prior comparing mattress there? your category is number merchandise in the transition assortment that if of are done, seeing,

Norm Miller

partners should two. still floor we nothing done. of through -- done the but completely It's almost be work on stuff all or some forward, mean I the that new do It's to the material. next month have in here clearance

store how pleased move certainly very we that of the like in our fourth our see seeing did the with very We're new same You we're product. coming new customers category frankly, quarter. sales won't And out perform impacted have received -- very, well. partner the gate the and and

John Baugh

be. sense I'm and XX-XX guidance there last net a versus but will high not the off to can on loans yield I call trying the get has How but I'd goal I changed. program. quarterly on for of guess the guess very any case? this cycling yield insurance it the is Obviously, be comments where that's us me Give love are question, color my old guess But timeline QX with new of it the into some sense the year, just are the needs with a a in you for new? assume originations And great. back I you yield. the and your gross, this give to what we I well

Lee Wright

think, the I next you you of about John, middle I there. best should think when we about know real asked the quarterly, and get year to way think really

probably can that's at so give point. we you this the guidance And best

Norm Miller

course on we're year $XX impact Lee's the just standpoint. piece the, $XX to that we million to that's that on $X to million going point that the feel of insurance And insurance will to an million the it's top. quarter feel from mean the million over material a a I $X and

John Baugh

one I going up XX would XX? make mean XX on a yield, is that range. would the And just it What the on putting down which following guess to you be be. pretty to the factors I versus good XX it's without

Lee Wright

Well that the what's give, be, you what that obviously go utilization have if comp there much is variables factor the think variables John. a there's and obviously we But comp, into are goals you do bunch going of how a I lot this about the but… in offs of of mean to charge to

Norm Miller

It's sales even sale. by

depending on stores XX.XX. from our new with still XX they vary XX% in are go to higher, although we As rates

between from impact whether range. it’s XX.X states even it have various mix So a where that standpoint XX, falls on sales XX.X, the an will in

Operator

remarks. like to would further turn our now Thank Miller I no phone I over am you. Norm And from any showing back line. questions conference to the for closing

Norm Miller

we quarter fourth first year And interest able with to Thank XXXX been at you. Have share in fiscal results. forward We to organization you appreciate and the day. the with a everyone’s end look the quarter. our of great everyone speaking

Operator

have gentlemen, today’s the in and for Ladies a all thank wonderful day. Everyone, may you program participating disconnect. and you does This conclude conference.

Conns (CONNQ) 5 Apr 182018 Q4 Earnings call transcript