CONN - Earnings call transcript Q1 2021

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Operator

Good morning and thank you for holding. Welcome to the Conn's, Inc. Conference Call to discuss Earnings for the Fiscal Quarter ended April 30th, 2020. My name is Brock and I'll be your operator today.

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

this is distributed conference company's reminder, Relations be a As call company's the dated this and Investor Xth, accessed opened via earnings at being June XXXX market was ir.conns.com. before website morning can release The recorded.

present company was on and a certain call statements the will to diluted share. per the securities some risks of management call, differ financial materially of are based in These federal company's cautions today's are statements made measures those which concerning most necessarily earnings today. release among are which results the other meaning and to within cause future this for you the events. performance of comparable or I uncertainties, refer adjusted that expectations to issued could measures, beliefs these indicated non-GAAP the During GAAP such statements discuss, The forward-looking that to subject adjusted forward-looking reconciliation company's must earnings assumptions, that net today laws. statements loss their from Please represent remind measures. actual

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

Norm Miller

evolving business two Since the Lee pandemic. Conn's the actions economic to COVID-XX extremely call additional welcome quarter fiscal market earnings and to months current conditions as of our we quarter of to last the George economic and to our and first call you taking details only navigate turning today's crisis start the want provide result Good by the response a on on call. who are fluid morning remain COVID-XX I over and ago, year XXXX call before to landscape. updating and conference will the

offer municipalities our all recognized open. products the showrooms communities remained first essential we nearly our home quarter, During local the and

channels has and have retail In diversity our the Conn's the addition, encountered offset of period. retailers helped offerings, distribution during this extreme and challenges products, financial other

local the We will safety ensure protecting adapt and in-home across actions mandates employees of and continue Consumers name to as state, looking our brand we our federal, to crisis markets the decisive their health products are evolves our high for customers. monitoring take and to lifestyles. are quality we and

credit compelling Our times. free throughout these especially and will home demonstrating in next-day delivery COVID-XX their during crisis, business to We options believe purchases. our Conn's of are the flexible resiliency also finance support service with Customers model. and challenging platform remain consumers product affordably are for the strong omnichannel looking proposition resonating value

the we proposition and scores the as resonate more believe value As consumers as country with crisis, from our addressable that grow access decline credit will lenders other limit market emerges credit. our will to

believe aligning will addition, consumers their be in focus increasingly In interested in that products. home with we our on investing homes,

dedication, over crisis, also from thank I we times. near-term the made a their team, to and through products. want past of the will for the uncertain benefit we retail serving continued COVID-XX of business will years, uncertain believe as financial and investments leadership the While our the to result our experience have these our our our five we customers associates diversity remain

Lee, are who COVID-XX details we actions and first the on let crisis. will overview, quarter results provide the to respond more operating our this call with me So, to turn to over taking the specific

Lee Wright

more in crisis his Overall, of of will debts provision. was first credit the bad quarter with our with than quarter George responsible under which provide performance for our impacts results in half allowance due our reflect Thanks loan underlying losses performance, the our economic for Norm. build and of during the accounting associated the COVID-XX components credit and for was primarily allowance COVID-XX the bad prepared our to quarter Starting additional debts for the CECL, mixed, remarks. provision crisis. on for details portfolio our first

core strong benefit the during trends. stimulus, government our refunds from help tax portfolio quarter, performance, favorable combined which collection and and customer However, payment drive with

basis quarter first spread points. Our credit was XXX

increasing focused Over of to the to economic mid-March, quarters, lowering credit in selectively performing de the to pandemic. pressure series our be we lower on risking a higher underwriting of payments, next risk COVID-XX originations In the elevated the as of remain response we began spread implementing under limits. we crisis. and impacts and several credit expect Overall, will continue included charge-offs reducing our credit changes down COVID-XX applicants, segment. vintages remained due These

believe we to taking prudently result, manage actions necessary risk. are we a As the

continued quarter, of the in-house balance the XX.X% year. financed and eight compared consumers sales in-house the During first to offering level fell Conn's third-party even retail the the through month. XX.X% through credit further of balance multiple in the to options financed Conn's May trends credit, providing years financing in was and to sales Unlike the for financing alternative period fiscal same while partnerships in diverse a credit last as These lowest have our we with of companies, still other retail tighten fell options. flexibility result for

XX% and derisking in retail Financial, relationship Combined, further to experienced strong and During which sales an card of reflects higher segment. Synchrony we and wide sales the to cash in credit ability attract credit we financed credit our first over variety with cash of through customers, believe quality our were our quarter, a Synchrony transactions increase customers.

to of provided credit number customers. and capabilities, larger quality delivery, higher omni connect next-day experience Our in-home opportunities channel additional a with service

result sales during to application are underwriting higher lease-to-own total of The opportunities recent of in and expand balance the we believe sales quarter. changes there we experienced. addition, through first as X.X% our have retail was the In volume sales lease-to-own a of

and execution We lease-to-own are and Progressive higher internal to continue working with drive our refine improve to sales.

collection the are past many we down in-house relieve efforts and government the customer experience our own has programs refunds leveraging stimulus combined with have relief from saving internal Tax gained using customers that support have disproportionate programs. balance through lower-income burden offering, Consumers disasters many despite financed experienced with have our For to we crisis of our sales helped debt. the have more, excess households. and cash to COVID-XX less of pay with financial spending had on consumers some been also natural impact

cash a first repayments trends. outstanding line in with seasonal quarter As result, loans were on typical

quarter. which by encouraged year the credit we period we application are offering. prior are need demonstrates This Total application in growth four the XX.X% throughout experienced the we by years. and Lastly, representing over applications strong XXX,XXX the we our believe quarter unique from sequential was in seeing, for driven volume strong first to growing in the the applications quarter, first online increased versus improvements the trends year in-house applications highest monthly first prior

lasting the credit we As relationships believe experiencing within establishing the continue strategies COVID-XX uncertainty, can customers. of period sales navigate to will and underwriting our respond in-house retail application you can as strong over while ensure to decisive see, We this crisis. tighter near-term, we to significant impact with trends offering we these our are necessary segment actions credit are but taking economic our for

for first appliance and performance higher segment in XX.X% the at more of office benefited from down new stores in detail. home sales. sales quarter home So, let's our contribution look the Total were retail retail and

our including sales primarily XX.X%, stringent and standards discretionary to sales due impact operations, the COVID-XX same-store quarter of were more First categories. underwriting of down on lower

early in March As call, approximately and last during quarter the quarter XX% we sales. COVID-XX sales result conference impact reduced fourth late implemented underwriting down same-store to our had improved were response mentioned in levels. occupancy a crisis store of on April the proactive and sales quarter first and from initially hours the changes on Same-store as

sales April, only we by are retail that momentum in April. May and XX improving trends were of for percentage an improvement started while encouraged Total over the X.X%, May. were down down end representing the point positive X.X% from retail sales continued same-store Towards

In we the since by impacted crisis. began sales been in same-store mid-March adjusting we underwriting addition, response estimate in to XX% to COVID-XX have XX%

in the to drivers in rate in We Last credit year and XXX% in platform more year's digital experienced engagement. Having which in retail but result but offering. diverse and percentage and speaks We enabled points the growth XX and the the to in May This the the cash, sales e-commerce May sales over XX.X% compared serve through and were of but over uncertain increase increase, to are represented growth as for increased environment began. customers underwriting sales also of retail customers also retail down model have monthly robust X.X% ability this stay-at-home second to the from down a of requirements up to recent our economic the sales, comparisons Synchrony February XXXX. applications capabilities launch only mandates and trends compared card, this our purchase, e-commerce X.X% in period during from for were business Recent digital encouraging, the payments our is strength important May channel. of new growth the our first continued in adjustments quarter. growth increase quarter. dramatic retail challenging primary fourth not performance of of The channel variability customers is and this significant later accelerated we expect in-house also before highlights our believe we credit month support credit payment continued also and quarter customer prior

We and momentum strategy. continue to evolving invest capabilities e-commerce in mobile and building is our digital our online in

our delivery future to offer our goods distinct households existing In directly home large a growth. infrastructure ability and of should addition, is next-day which support advantage digital free to

driver sales. was performance Another first meaningful shifting to of mix quarter retail retail the

essential total are in declines increase discretionary home high customers office and prior shift period. retail more and experienced and It as appliances office combined mix sales began partially in home we mattress category. fiscal gross margins margin, furniture categories, year not furniture declined the basis home to such home offsetting mattress, shelter-in-place, retail in within lower and as first products electronics. points consumer the This and which from appliances product with is to quarter our for know XXX the pressured important categories demand as in As

the on year. eight of markets six showrooms During fiscal new in this we and new opened first existing showrooms to plan two a opening quarter, we total

strong resilient the is resources current of compelling leadership to credit team, financial will economic experienced as result result This combined model necessary model, sheet, business navigate changing and the and to of retail platforms. year delay a of my a crisis. challenges our for provide omnichannel our with COVID-XX of cycles year. future and fiscal crisis, the part distribution fiscal we showrooms have new To new have we amount to decided to conclude planned this differentiated associated also any center showrooms response prepared reduced remarks, Florida to our next As believe balance our the with economic our the as COVID-XX

are We our we the employees, working forward COVID-XX progress the to making pandemic and to period improve we hard investors on credit throughout and I customers, this communities updating our and as look support performance. to retail and are respond

Before operate. On associates we I XX dedication also call your I this want the for behalf thank of work, leadership over to through George, across challenging team, states service, period. you to the thank entire hard which and our in turn the

our Now, review performance. to let me turn the call over George to financial

George Bchara

Thanks Lee.

financial discussing we I from to results, amended On of interest facility a quarters items. by the ABL our want highlighting of June relief coverage covenant. terms to provide XXXX, couple four start the Before our Xth, of

ended adjusting $XXX quarter a the relief at million available we had liquidity. XXXX we with as and will approximately business pandemic. help facility amendment down buffer into to covenant million after when immediately ABL our that of $XXX put immediately for Xth had in situation the current result million total and liquidity funding navigate in and of June that of available on liquidity a our cash believe March, facility. and over the source period is COVID-XX our To the important are million liquidity cash context, required available ABL $XXX ABL of and during cash we drew we $XXX Our We this uncertainty of an the maintain we liquidity for amended

As the to existing on cash, CECL, February liquidity XXXX. in available COVID-XX the receivable and cash our have little see, has want as the beginning of and Xst, of used impact relatively paid since pandemic, you I can periods, adopted portfolio actually also we we some less highlight accounts which we customer purchased have down. and generated inventory

to increase Xst, result bad CECL, a recorded increase on the As our recorded million change adoption the reflect February of to expected we of required lifetime $XX.X losses. debts for allowance This through XXXX. a to equity was

through account for provision for result recorded increase pandemic. $XX.X first share. and This bad million bad increased allowance debt first outlook first quarter in change our income for to the a economic the per was net debts as impacted quarter, by During by the our also of $X.XX quarter COVID-XX the

and three months prior of in XXXX, is communicated due we the million. increase economics or we've was CECL affect effective $XXX.X our the flow higher of from period before, operating over the loss, fiscal As increase working an flows fundamental primarily flow The Despite an to record for management. business. cash capital operating our XXX% does in sales, accounting ended cash strong change of generated April XXth, cash we not third-party percentage and year customers, a payments

last same first on a of our for to revenues year, year. XX.X% $XXX.X from period representing the million the this results, quarter fiscal basis, Moving financial consolidated fiscal were decline

charges fiscal GAAP credits, for of earnings GAAP and compared investment morning. for managing cents XXXX from continue SG&A first of adjusting per reported quarter fiscal available SG&A GAAP period press year net and state $X.XX we non-GAAP year. certain eliminating this period loss focus financial the diluted the of $X.XX the fiscal perspective, the a per the reported to a million, an of expenditures, capital operational prior to Consolidated to for expenses. X.X% first in last share of working same that or $XXX we quarter, period. uncommitted aggressively $X.XX For certain more issued loss quarter levels, share decline $X.XX year. to and was Reconciliations for capital of income last share measures income compared basis, a per share reducing fiscal we the non-GAAP per On first a are quarter first our year was delaying on for From release diluted

costs and began and crisis with quickly showrooms our XX through COVID-XX aggressively associated impacting more quarter, XX halfway reduced months. than opened operations over expenses we the higher As last additional the offset the

Retail points detail, total costs for compared retrospective for in retail gross the period $XX.X quarter same quarter RSA the our year. first a lower from from at Retail more operating was decline were income the segment segment the a last margin first to million Looking same $XXX.X fiscal million, was gross the year. period in a retail XX.X%, decrease $X.X basis for last revenues million XX.X% higher lower retail quarter margin year. sales, products. driven by during impact and of the margin of fixed primarily same in reduction XXX the commissions, logistics on The on last decrease sales was income period

charges year. a the before Finally, period The segment fiscal year. of a turning other revenues for segment, taxes $XX.X was last fiscal compared million period finance taxes from $XX.X credit before same were million to decline last credit X.X% to same loss the and million, $X.X loss the

The due driven the first increase $XX.X quarter primarily was the year XXXX credit With a of questions. the in segment to segment, loss million build Operator, year-over-year questions. allowance fiscal credit provision quarter and bad was Lee, debts in to for which as happy first take this result open please Norm, your to the by call I up overview, are of COVID-XX. the

Operator

will this a At we session. Instructions] is KeyBanc Thomas question-and-answer with question. you. Capital question conducting [Operator Markets. Brad Thank The Please first today your proceed time, of from be

Brad Thomas

morning, question. good thanks my and for Lee, Hi, taking Norm, George and

Norm Miller

Good morning Brad.

Brad Thomas

bit to is little thus May trend you're you of And bit about Could maybe that's what up moved selling how June? bit Thanks. far some it how you've is as I a for? discussion the that customers with talk average they're of price and underlying coming in and of show drivers. into and you changed seeing the maybe changing, a sales wanted a types start-off to little same-store first the maybe

Norm Miller

Brad. absolutely Sure,

call high so into down we've a First, build into as XXs. originally remember through teens April couple in were, that May, just the same-store sales up -- to the XX% rebound mid-April kind that you We X.X%. a continue to we of being XX% the the seeing from where ago, low May with of if to months from saw only recap the -- the COVID seen we were down sales range. hit, call our same-store pandemic as and And

seen from a appliance mixed were home product which where have why is margins standpoint, shift -- a you they a much an stronger We our from saw standpoint.

seen in four three will the material consider such we've pickup we as Now, I say weeks, last a or furniture. in weeks what discretionary categories, more

pandemic. was We have from that the down the it the materially XX%, midst back XX% of furniture seen category pick up the in

So, that's positive see. to

seen from have material We a a standpoint. shift mix

in as coming run high XX% approaching is As sit of during at as from a less business to than XX$ XX% standpoint, XX% to mid XX% -- customers Conn's of is the today customer you down historically well, heard tightened we've in. credit time pandemic here the we the we've which financing the range, -- as

quarter the still of a since there a go and dramatically, years a in is going up that ago in result Lee also in significant as the year points ago expect strongest partnered where think to it XX%, seen just but from which our with it As basis X,XXX in under up is May, have lease-to-own Synchrony upside mentioned we've We've is be, May. over up our our script, we we Progressive forward. seen performance that at cash and seen for two which that quarter we've X.X%, we the customers

Brad Thomas

And on that here? that the about get the to to headwinds you about number just -- ahead or deaccessioning what's really you underwriting the loosen Norm. how number the ability to tightened rate if perhaps follow-up the from that, thinking think you. Is more run XX% referenced sales? on you tight That's done, just are same-store same-store what's current run and tightening rate sales headline you've the months the headwind with tightening helpful, again, to and Thank -- that XX% that

Lee Wright

Hey, Lee. Brad its

we So, tightened believe. as on XX% run to that you that XX% said a basis is we it rate have

we there we're as customer in we customer and standpoint, be but to quarter on continue it is to from Synchrony payment increased and about go seen be react. But the about I thoughtful cautious. standpoint, a have to economic today, forward omnichannel retailer stimulus environment card, is talked cash, certainly able that our and what's government as about, mix lot Clearly, an about to we there's a -- to think the the obviously, customer dramatically, in as we're the back going collection to be we that pleased helped we year, credit how products. from pretty as As want mix and with as talked Norm of going we've go why very the home fact providing you which

the and computers home saw office, as the equipment going Norm home, online of then in to computers, it we in more we now mattresses, have their on product back furniture those focused equipping, is about to talked which those coming work and the at-home on So, the pandemic, appliances, shifted all the categories. our and customers, customer for we the what's had necessary process, again learning, early as

we're the So, very who's and regardless actually we're in credit of actually, very they door And ability pleased home. our our that full spectrum to position. customers their walked of serve in for whatever good want a with offerings,

Norm Miller

to about business of effort increase actually recognizing had say grow, in the did pandemic. the start that I that is I when the Synchrony, customers what not talk with cash us, Yes, of strategic Brad opportunity would we

several about see of business sales of the our mix back, XX% -- or If over before steady mix a seen the you you quarters, before product the you've years ago. the from our increase of Synchrony pandemic will pandemic XX% go

up of the that So, we're the higher pandemic it we've balance before percentage seeing seeing into sale low now and pick-up even that. than been XX approaching

effort that utilizing So, Synchrony and credit we've marketing ensure and to efforts been with spectrum. putting base we're energy tapping the on our and entire that customer

products lease-to-own think differentiator out is spectrum, in with significant in the a the that and full the differentiator marketplace, differentiation Our -- we to fact to else cash Conn's for products believe and offer anybody merchandise us we from in Synchrony credit the spectrum -- entire we but can the gives customers the and financing marketplace. market the quality the the Conn over our

Brad Thomas

so Lee. Thanks much helpful. Really Norm. Thanks

Norm Miller

Thanks Brad.

Operator

from your The Rick next Please question with question. of Stephens. proceed Nelson is

Rick Nelson

Thanks Good very much. guys. morning

Norm Miller

Good morning.

Rick Nelson

to other there have be the you economies Norm, speak you're opened way trends to or So, seeing book? up as credit can any to credit frame-up with April what delinquencies from the may you want May

Norm Miller

that that early March I with with initially we early March, started with very pleased say and we're we credit mean, clearly within tightening with the what I in book. initiated the very, what process, the tightening would seeing had

the our to payments look book, both of is customers, But frankly, side Now, will very going year credit our of optics certainly be of financing denominator certainly the when is or the to Conn's stimulus within stay behavior be so ability in at a the smaller some of us combination metric smaller, portfolio, the we the midst the customer with the that's and above payments going be challenged obviously very, the at where on customer, from to to the going standpoint with forward. pandemic, as ago, forward. were and in encouraging contact a the

to predict, would lenders so up the very sure extended you us standpoint. when heard little the surprised I from difficult unemployment still pandemic, frankly, with the the an the point marketplace, cautious I'm how to recovery being say. behavior But and I in encouraged and to we're the Now, say in out unfold, very from this many continues as there for benefit customer would a other underwriting of

Rick Nelson

of the that like about that want pressures to mix profitability could curious we as margin? stores? the you but And margin provide of online those versus the perhaps in the how I basis Great. drivers, what a as if know ask saw on the that their around on saying Thanks for I'm sale, pointed color. some quarter. you then you're category one to Also compares color terms

Norm Miller

that performances consistent. the two fairly year-over-year of generally, XX% at there's when the Rick, drivers, you I'd within just look margins say XXX mix the probably What and margin categories. categories, what simply between down we're the basis primary is with plus being pleased, is points, it's So, it

As we mattress our to our compared with and office, margin those -- mix furniture and lower appliances home appliances stronger are categories category.

XX% of probably driving that's the mix. So,

other for from both new distribution bills distribution although, a The built of standpoint, on cost have the we going starting the XX% to that Florida Houston we've we there. margin some the Florida costs center overall clearly deleveraging -- opening, some generally the from standpoint, a are incur are and is we and sales to lower delayed distribution there delever your fixed costs

So, that nothing have category. the things. it's really about There's any concerns those margin individual two inherently we overall on the business of

Lee Wright

e-commerce the e-commerce, than home. it's we we're growth smaller online, from The very basically the standpoint, ticket our might we in but about front product standpoint, we're inherently to customers' I excited an we're overall growth same obviously, overall -- Rick And but see say the it's the delivered those overall very that less from our bricks-and-mortar pleased of logistics little is us. doing have product size the in only not with margin we sense the profitable seeing, same we're into products from get a operation the what as an bit that Again, the operation. have opportunity again,

Norm Miller

there commission-wise with payroll less have and costs typically e-commerce. You

our with So, anything actually good is your the if smaller, now little e-commerce even as tickets right business. better margin not net-net rate a of

Rick Nelson

that. for Thanks Great.

standing of the market? I you you're of weakness? patch; Finally, ask guess could areas if seeing what decline terms and strength performance, in about what the regional given out the price is oil Houston in I oil

Norm Miller

we would market don't frankly We very have that aware Yes, a the than Historically, company lower say rise what that oil we they much. now average. run -- and those but level higher They that's parts West regions that a Houston, where a credit of are the market. the within in is and impacted and Houston oil company They're delinquency-wise, in about tightening area we cautious than still consider that as and -- in strong are West if I would linger regionally those Louisiana there. of at that oil a have seeing seen case orders other adjust Texas, averages even the at from is markets. in delinquencies do highlight and consider accordingly we're the I that be standpoint to standpoint, one would in we by that up

Rick Nelson

luck Got you. and push good a Thanks we forward. as lot Great.

Norm Miller

Thanks Rick.

Operator

question Brian Nagel Oppenheimer. with The your of Please next is from question. proceed

Brian Nagel

good Hi, morning.

Norm Miller

Good morning Brian.

Lee Wright

Hey Brian.

Brian Nagel

Thanks for question. my taking

The question the took retail. tighten it consumer. to that But credit you or the with -- surprised talked said understood, first underlying Conn's -- ask also even but to you've you've bridges standards, pleased that think, correctly I want the lending and said you've clearly in Norm, action call, you on performance as been I with been if of the

Conn's getting is credited for demand underline So, here the shorter term time nature, good? selling the to question of risk in too quite with I you're unique say does to the have nature, actually run is, is especially if so this in products downturn conservative

Norm Miller

businesses, mean seven, the eight, make out it's question, -- XX the issue fair into credit I a see for fully months future. today, won't we the That's Brian. decisions the played we those nine, with

in a standpoint more don't than down on up give are So, We an we opportunity. to the a question. the plays we longer and detrimental significant nature a if deeper the from the sales conservative run, lose have recovery expected. that trade-off from standpoint recovery out unknown take road, nature, and fair that side with credit It's but down would if the punitive some But issue whether may ensure in a we're short -- that to risk standpoint, road. a the a frankly, from it business more that I would the credit is it's way if underwriting impact is not in

Brian Nagel

we -- think, loan is [Indiscernible]. the a change clear and difficult how It's And loss think for and should but within understand this credit know dynamics, loan the the this explains George is Norm. help clearly how I us some more way that to given XXXX. shifting of second noise here Yes, balance accounting you is through Thanks question, I underlying -- provision the provision the could George. there about loss the do,

moved initial the change standard? at in you've that Now, accounting least past that

George Bchara

think of first the all, macroeconomic in outlook to related million to in change COVID. -- mentioned, the a first I provision Yes, quarter so, in we as the you charge related $XX.X our recorded

of we've portfolio year. as the charge-offs Lee As seen not next expected and the mean calendar COVID-XX and the result is Norm over couple that what of actually in mentioned, last until that months a would deteriorations won't here our occur

fair allowance think I what would this we year decline balance where expected is that COVID-XX. the is recognize will say offs charge and before you from say it's stay to slightly So, the maybe it

Brian Nagel

Thank it. you Got very much.

Norm Miller

Thanks Brian.

Lee Wright

Brian. Thanks

Operator

is proceed The of your Kyle Please next from question. question with Jefferies. Joseph

Kyle Joseph

Hey, guys. taking very questions. for good my Thanks morning, much

few the side of a credit more Just George. for guess I this the one's business, on

just economic talking could specifically? you -- economic the underlying GDP a just If and that baked about assumptions give us reserve currently are in for here, sense unemployment

George Bchara

many Sure, I issuers. which based could with a is give I public Moody's forecast, we you consistent a I other use mean, think general macroeconomic sense.

that out couple case was with output where performance for seeing and base assume that's of portfolio we're of the of Moody's pre-COVID that then Our shake the a would it first kind -- the converge quarters towards things and economic where consistent economic today. be

Kyle Joseph

gave by DQs you sense your terms get delinquencies it Okay, to just of just at And into I delving of you a did if April. data, trust really give the credit, in then just how there. master But us month, dropped looking could -- that's helpful. like color trending were monthly a performance for the comp and appreciate wanted between March look sense the on

March, books If sense even delinquency from did a between consolidated perspective? for and what April, a into my you could give your us

Lee Wright

what got their stimulus own Kyle, an balance I us. benefits in through and government done. we I see, wrote came we you that and guess our COVID-XX which roll we behavior saw we due you and Yes, guys and it than to saw which March well through consumer in April, what this the it's so is was what sure. truncated as but would I sheet, What flowed tell traditionally season a tremendous the obviously for the pandemic about tax to was March started your through in was difference Lee. interesting report, thought in saw

early of the customers actually to but in And forward and and portfolio would I Norm as as the we're of of we performance of and overall tell our continue forward, the think about, uncertainty benefits what do still some what for all happens about talked seeing gives obviously, July bit going as liquidity do today. now, came look we right. the us try obviously, we see the balance overall in good and out we So, credit move how right saw unemployment from versus and their how end we're extend what then our after in that's we a pause quarter, we as quarter, as some you that and we in

Kyle Joseph

mix obviously, the shift Got on of has it. And levels at portfolio then Or impact yield a like that DQs? is upwards, offset just modeling, and that that in I will the pressure, being looks under bit higher more a of think of higher more there? the is terms deferment -- pressure originations of that the by more is yield been a

George Bchara

driven it's levels by of No, charge-offs. higher

Kyle Joseph

Okay.

George Bchara

offset but quarter. higher it's gross being yield are the in up, So, charge-offs the by

Kyle Joseph

That one makes us as me just trends update reopens. economy the if could for your And competitive an last you give sense. then on

guys you about your two trends on competitive on think fronts. I

more First the then one broadly other be is retailers of versus second credit. availability the and would just

competitive on guys to give started you update economy as the dynamics those reopen? could If us an

Norm Miller

Yes, and we seeing in a Kyle think the elevated at standpoint levels. comments; what in I from we're -- continuing applications I mentioned quarter, first applications first to general see would say it is

and that seeing across I addition in year-over-year, one my in highlighted spectrum higher Conn's comments financing cash credit customers as undertaking in our earlier Synchrony customers, that's credit we're of responses, significantly we're quality mitigate, the that. As to our up customers helping the to and the tightening

the Now, applications at traffic online. showrooms well as stronger of least we're in out initially the seeing as gate, our

customer real the well-positioned that with home both our be for we from well we're is think credit and on with what and products consumer. any and to credit demand to positioned some there think we type out spectrum have the of we capture offerings quality So,

Kyle Joseph

helpful. taking and for All Thanks questions, good guys my right, much very very luck.

Norm Miller

Kyle. Thanks

Operator

proceed your The next of from question is with question. Please Point. Ryan Compass Bill

Bill Ryan

questions. Good morning and taking thanks for my

First agree on to little may well, current other relates it a one just to see period of related more the comment up more what on thing the any need But to the little better it quarter, be been than credit credit I start tightening impacts? bit in of you standards, a too where back of they you maybe the to relax provision because be your provision, to specifically million time. if second end stripping to it to began And this having and with as granular you component a sense as you clean $XXX cut before were over up the before ancillary what could place. in loose longer your Thanks. to have take originations sort all obviously, out credit you of bit that for conservative COVID-XX

Norm Miller

Thanks question part the it Bill. side. give -- provision and the I'll to talk I'll George answer the first I'll on second let and question to of

So, we for see able and to tightening performance the see see next stress months, we to envisioned as unfold the is of where will us took risk, from -- of default and those the payments delinquency obviously payment we how to see to customers what segmenting we that existing see variety payment delinquency a and would depending want standpoint, standpoint the see is from credit we new a regional on the how -- and strength including in perform and portfolio, want in consumers -- we're over those buckets ways, standpoint, a from roll what first, with we that that the tightening do they to that the three frankly, take to needed in giving significant if as first quarter to our we surge not that be fearful a we be. second ability we've be additional increased the or as distressed if, is because confidence customers provision that there had happened six the we determined not first

George Bchara

terms the provision to earnings million include the it, of in Bill in -- about $XX million is we've And which best mean, I the the provision, it the $XXX I release million way laid out think Yes. COVID-XX, $XX.X the also that first the to the on from including that portfolio, back had gets million higher outlook originated and we year-over-year entire that's what in to economic then related we $XXX quarter. charge-offs you provision And number. think

Bill Ryan

you thing, do doing And Okay. transaction? last just ABS next one anticipate when perhaps the

George Bchara

an comparable deals I I seen a get over last ABS or here all, the number encouraged the don't ABS do now, some the position think six done in where the last for can a we've mentioned Lee Yes, We that we issuers an weeks need here portfolio while, first of transaction think mean, because ABS in I transaction we a we by market of that to mix. of say are also would but around factors Norm and we primarily right do right now, the are of -- so. shift --

less the needs. So, expectation third-party the said -- have selling Having in that before are we're that end and year. down the our one selling fact to the sales fact we is do that, more liquidity to of customers, fewer addition that cash

Bill Ryan

Thanks. Okay.

Operator

closing a to to no Miller are turn back for questions call time. like Norm at additional There remarks. I'd this

Norm Miller

to thank for in times quarterly the on associates Thank look and of at information Have that operate day. next the for hard great I all the their XX these to our the you much our company states challenging and we sharing in call. very company. we our during work want again, a And facility you interest forward with across --

Operator

This concludes conference. today's

your this time. disconnect for you lines may at your Thank You participation.

Conns (CONNQ) 9 Jun 202021 Q1 Earnings call transcript