CONN - Earnings call transcript Q3 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 October 31, 2020. My name is Doug and I’ll be your operator today.

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

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

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

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

Norm Miller

the navigate on opportunities. pandemic operating extremely successfully remains market the capitalize company impact communities conditions, financial on will to allowed also begin our welcome conservative quarter the complete who our quarter economic with XXXX believe additional overview many We business long-term current of the as call to turning the third over and provide Conn's with comments the results. continues Lee remarks prepared call to to country. the before I'll The morning, to a conference on Good additional details while positioning fiscal will call. our approach and has year fluid earnings environment George, the across strategic growth

of to improvement Our sales third-party the combined in industry in home XX% sales, third certain options underwriting XXXX wide the increased crisis. financing store Despite in growth underwriting impacted am which continue cash and and approximately beginning We store believe by drive strong in response Overall, implemented during quarter. COVID-XX be we to strategy related the sales. credit store product by shortages same with in year-over-year year-over-year I same reduced by these changes product changes multiple sequential inventory categories March third encouraged quarter. impacts, sales continue to XX.X% same the

quarter uncertainty. earlier and Third to credit year adjustments made high prudent unemployment and impacts performance mitigate our reflects quick the on the potential we of business this economic

credit Since of our and fiscal and sheet reduction sales. of higher higher our beginning and of in the the segment collections balance strengthened has benefiting quality year, is cash the result, balance a third originations from the stronger cash As collections. cash due as to party strong rate newer, significantly our result portfolio a

a fiscal percent with ended the balance level of six of third over we the debt as fact, In lowest portfolio quarter years. the in net

us an on the during closed through COVID-XX since ABS business pandemic. support the progress believe the our successfully in October also quarter onset we the We XXXX, of our the first We provides crisis. to significant transaction made flexibility with

but through customers, help growth include to expand omnichannel COVID-XX opportunities. more continued basis will while the spread, capabilities and term the X,XXX points During our of credit which pandemic will actions applications consecrated only our solutions. through e-commerce third credit platform the for long-term enhancing credit invest platforms, declined to third lease-to-own growth expanding our initiatives, These capturing also party business long not to more also achieving extend of quarter, our in we and our

potential are to expansion opened continue in in the our strategy and we first Florida fiscal targeted Xth, we geographic distribution the XXXX. that open November We a showroom by in pursue Florida addition, market Pensacola we leverage represents. next new year new and plan markets. In to Lakeland center our excited open to On is Florida scheduled our to in showrooms our majority open of January showrooms

during As period. you of Conn's, to we I investing behalf continue can see, remain navigating of thank On all to continued growth our everyone need. to of to our and this time focus crisis, our opportunities. communities successfully in for on COVID-XX their in customers want business future personally we while this dedication challenging the committed helping at associates support

will overview, over results. the let with our on details this me provide call third turn who So more operating to Lee, quarter

Lee Wright

options. today at successfully Thanks The implemented our looking within of detail. strength loans and remarks credit outstanding to the start our Overall, Norm. prudent execution seasonal is repayments multiple cash our we while of my the with COVID-XX more exceed in our experienced. credit the crisis, navigate of operation credit successful credit we typically our in retail supporting encouraging March continues business prepared the reflects mid third-party to impacts on strategies I'll the sales portfolio trends

collections years. the rates cash internal collection increased our lower third and We consumer believe having positive quarter year-over-year best XX.X% payment are third and quarter cash the on payment portfolio. rate fact, over within XX efforts the impacts in In represented spending fiscal strong

and last in conference stated balance of within programs we've accounts to portfolio. call, our restrictive more our reage June we've on revised certain of improved reage the be As our

by and XX.X% from the the XX.X% result, reage is has XXXX. value on XXXX, As down a million or balance XX, dollar or July carrying $XX.X million XX, October of of $XX.X accounts year-over-year declined

prior economic credit place. plus overall with period. for has and fiscal given XX year caused take will day the time In dollar declined put It balance trends normalize the challenges we've from has delinquencies to the pandemic strategies addition, credit prudent in COVID-XX the severe

remainder for this year. However, expect offs continue portfolio to performance underlying fiscal lower the we of favorable sequentially to lead charge our within to

scores March’s underwriting originated addition, benefited higher In existing a mix higher of FICO customers. from accounts after have and changes

see their continue prime also lenders We quality higher to applicants of standards. prime have other underwriting near as population larger and tightened

economic successfully are challenging this credit a improvement period, are And to improving uncertain XX, point X.X%, by and the navigate trends continue XXX spread encouraged our basis XXXX, experiencing. was July from we As XX, XXXX. on representing we October credit we

our We prime company's quickly also of consumer over continue at Conn's sales years to Capturing and expand the finance are teams, joined remains to has segment. party capabilities to the Credit and our success companies. near for opportunities enhance credit the our [TJ] to a in of underway maintaining Officer more sales, party retail third solutions experience lease through important third and prime represents priority identify our retail increase Conn's contributing for XX providers. credit July an while leadership various own and to initiatives opportunity credit [TJ] as several risk. is significant infrastructure in and Chief our

to business testing is flexibility strong goal, at of existing on and as still recent our We other that lease own should We're that ability coming in this standards. our results true demand especially to retail credit and model we our XX% our providers quarter retail retail have we both and working in believe sales risk the to Overall, to resiliency of total through quarters. achieve success I unique supporting the underwriting our highlight are least quarter. belief lease of third most our to de our forward our result and updating a with a business deploying compared credit credit applications own partner now tighter This be X.X% the sales and to look investors the diverse while more options.

favorable year reflect primarily in underwriting performance declined more compared sales our prior to X.X% the sales and year-over-year began year-over-year So for that quarter inventory year-over-year in we to throughout declined detail. which industry improvements response within underwriting, monthly XX% the occurring the We continued have by third segment and third headline estimated quarter. looking increase an quarter segment, the store tighter sales retail extent with party third crisis, sales, XX.X% COVID-XX numbers in sales Total these same which quarter X.X% limited implementing growth include in sequential do same These cash in of in reduced the at due same third we product sales store transactions. store mid-March combined third our positive wide while retail retail despite store trends the adjustments impact trends retail occurred same underlying during the the believe shortages to are to period, on lesser availability. a and believe not strong

the same and better see of in third sales quarter November store continued pleased COVID-XX are resurgence the despite came underwriting. tighter nationwide impacts to results than the We the

second XXX from quarter. increased basis more detail. Total appliance the product rate during in growth the our which in at XX.X%, the increase point represents Looking categories quarter sales

We Industry of challenges furniture and to remains throughout X.X% total experience category price continues of of and supply COVID-XX mattress related especially impacts challenged improving a significant are category delays, imports. to mattress as availability third also transportation categories. electronics as within the well as quarter category wide most starting result trends Conversely, on across TV our deflation. sequentially. continue chain furniture suffered for experience and as Inventory production, increased sales our consumer our

constraints inventory upcoming the our in continue holiday year. improving to quarter product availability expect first the We throughout of with fiscal season

our Turning growth to initiatives. retail

refine believe our of fitness serve to testing are customer core our all is in half in home leverage Flooring our is product of showrooms we increased trailing the and After Last months and both with only offer customers. tests select through E-commerce for nearly we core and related third better strategies we constantly equipment channel and have plan compared product increase expand our to e-commerce of are sales showrooms. website ways successful fiscal e-commerce more to this platform home new and represents continues XX% sale to unique XX upgraded continue now quarter our We of that in now groups financing X.X% substantial where to customers. to and products We of groups sold sales this our two launch that our markets, fitness flooring year underserved. than through house within core believe sales support opportunity to resonate more year's prior channel. a period. growth our new and product

assist operating impact of to our we've have organization, declined million fourth we e-commerce in e-commerce and several our have To efforts and accelerate today increased quarter investments we the to new expect initiatives opened fiscal which improving year-to-date continue X.X% total coming savings these SG&A increase offsetting expenses $XX.X year, investments, categories despite result, seven. fiscal additional in a the on cost the lowered period, in We to year the footage. opened will higher new number and across the in efficiencies retail to driving year successfully one and over stores expenses spend. we retail prior an third bringing expect our year-over-year opened across Compared focus As to square the approximately during have SG&A mid-March. showrooms total quarter, showroom since in

As of year. eight a of today, operate showrooms showrooms new and we XX across have fiscal states to plans XX to next open XXX total

that believe retail to to have grow brick continue simultaneously. omni-channel and business as and our mortar We an we both online that opportunities

to navigating demonstrate I'm So prepared the while remarks, the with progress sheet of service third provides business in the for continued financial team, to growing success our current thank balance combined strategies experienced of this our pandemic, and entire the manage and the and like COVID-XX our our the On leadership model to successfully This believe business. refining quarter model my the We work, needs results business behalf your of pleased our hard support period. the and future our conclude resiliency compelling we're to making with of platform. leadership digital resources through I'd dedication. employees strong necessary challenging our team

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

George Bchara

Lee. Thanks

balance position of driven third nine unemployment of sales has flow as mitigate drove debt the operating increase XX% our generated January In economic impact receivable which sheet because approximately at tighter third of actions took high by period. onset portfolio the balance to third-party from decline closed operating the million at during of on Over is our accounts October, approximately and net a balance and the the our we in rate increase from past capital quarter uncertainty. XX% cash business cash and of significant to our the and the ending potential materially months, we end business million year-to-date strengthened year-over-year million year-over-year decline is in XXXX, first ABS the $XXX.X cash pandemic. latest and since XX, the transaction the year-to-date, prior primarily result in $XXX This of quarter. of the the cash increase percent $XX.X The of and customer underwriting a stronger collections. also a in The our a as flow and

sold notes only exhibited transaction B ABS and all the is cost our Class pre-COVID second strong an points the XXXX-A for of in pricing have reflects and and XX last Our in higher best Class approximately pricing. million $XXX.X of We funds transaction. A demand basis market, than favorable with we Class achieve notes X.XX%. B through the the This

we in future current chose also of the of of enough total liquidity of credit We be of needs facility. B this provided issued the XXXX. on $XXX existing a liquidity million sold notes of liquidity Class cash X.XX% to business, business. the available our XXXX, million of that of believe $XXX.X offer and the had included At in later cash needs cash approximately million and we retain date in million our $XXX.X the the October current mature at million, under to support may XX business. capital tender equivalents revolving were B notes more than July XXXX, strong based the on $XX.X transaction senior which Class immediately to announced $XXX.X up and XX, support and our our position We cash The the availability to liquidity notes November

calendar to end of expect tender We the by the complete the year.

to have the can long As our and financial funds, resources strong needs remains and we position ensuring capital are of see, we proactively business. of support the term our managing you while our cost liquidity

we same of reported years. share revenues our financial GAAP diluted the consolidated an per basis, same net representing of a measures financial morning. income to million third We a per income last the our to non-GAAP GAAP net third adjusting the Moving release quarter, basis, fiscal from per decline $XXX.X On same for that non-GAAP GAAP period for income third were are for $X.XX reported year. press $X.XX to last diluted results. net and to fiscal for quarter quarter period compared share certain Reconciliations this compared the per third available $X.XX quarter for On credits, for XX.X% share of net of earnings was charges last the income share period of diluted the in $X.XX year. diluted fiscal issued

a fiscal savings success SG&A for initiatives. the Our expenses were the from million financial decline reflect results third declined period. $X.X quarter prior million Consolidated SG&A of the Year-to-date, our the million, $XXX.X prior $XX.X cost year year. consolidated expenses have from

focused While to year-over-year. quarter we controls, cost we expect remain fourth on approximately be flat SG&A expense

was Conn’s RSA million, of quarter margin. from decline and retail the X.X% retail points for the in-house Looking year-over-year decline were third revenues lower in the result of basis of Retail financing margin in sales commissions retail quarter our A from in same fiscal gross income of XX gross same more primary the period detail. a the for segment year. retrospective as fiscal a last the last driver at $XXX.X a period was Total decrease XX.X%, third year. decline

retail retail our gross this retail expect to the quarter. We fiscal compared a primarily Retail $XX.X lower continue fourth last segment lower sales by to margins, due in gross on period put operating for on SG&A and $XX.X same offset income basis million to year-over-year the will year reductions retail partially was pressure margin during million expense.

lower during last to Turning was The third Finance XX% other decline and XX.X% primarily were segment. credit decline and due financing fiscal quarter. balance of a to insurance of year due to $XX.X a in without customer a reduction income. from period retrospective receivable credit the in-house sale average our same revenues charges commissions in million our decline insurance the the portfolio, the the

revenue For fiscal to primarily XXXX, we balance loans. year-over-year quarter other due down year the finance a to expect of fourth lower be charges and of

as for shrinking percentages a Our the higher to was CECL. bad provision by allowance reserve a portfolio benefit debts magnified balance, under continues for bad from in a decline which result of debts

forecasted the deferral decline increase addition, accounts allowance rates. related to was debts third by that as allowance In partially during accounts. offset result This COVID-XX in of a these performance on the based in the a quarter, our the declined payment unemployment portfolio of an bad for received decrease

provision bad for our result year million $XX.X charge a to was compared As offs. the million third period for debts quarter last fiscal higher year-over-year $XX.X same despite

improvement credit loss before quarter. Our to taxes last $X.X credit million million year-over-year spread and quality Credit quarter The of compared spread which cash a the year. bad a third originations reflects of for for loss rate, driven a third-party increase from newer to portfolio as for in basis cash production decline the segment taxes balance same a the fiscal loss result a point X.X%, higher in a sales. debts, provision is reduction before and improved of X.X% was the $X.X last period the the by stronger higher XXX of

Finally, XX.X% year. the last loss expense effective million quarter rate in tax back the of fiscal $X.X in was Year-over-year period earlier same a tax by for recognized tax a period result reversal carry the year. a was this increase of compared recognized driven XX% current to third rate the tax that discreet as is

benefit tax as connection We quarter a of recognize the from CARES discreet planning expect a result to Act. fourth with in tax the

call question. Norm, overview, Lee and to I, this questions. to with Operator, take happy please your So are open the answer up your

Operator

a you. Ladies question-and-answer and we gentlemen, [Operator be Thank session Instructions]. will conducting now

line Our of Nelson first from Rick the Stephens. comes with question

Rick Nelson

more period? since Friday get sales Black you the I you [Technical same and quarter what if [Technical specific around trends Difficulty] sequential to fourth the store date? the quarter think that saw, potentially you think third improvement Difficulty] And could is those driving returning the

Norm Miller

the sales third his mentioned saw month improvements same through in improvement each as continue to we and on the November. Lee quarter we store mentioned in as see month of comments, So

So very pleased.

underwriting We a where changed standpoint from have we've in mid-March. not credit been

the anything house. year-over-year of really side combination because not is at on of that Synchrony of doing the cash and the It's cash by to it's driving driven improvement So lease own and third-party customer, credit we're being the that.

Rick Nelson

you having declines Are some right here aggressive so more year-over-year? [Technical could promotions we [Technical Difficulty] Difficulty]

Norm Miller

in certainly e-commerce And first promotions And consistent our of fairly year-over-year. No, execution better. say our I driving. would the us, up is to That's for I what's well store. very the online the in our I and well. has buy that some e-commerce had late-October helping doing never think for are pick think efforts We not time of very sales been that implemented November, we've drive month as

because So driving and what's on really side so have we as e-commerce bullish opportunities opportunities why primary credit non-comp side. same-store the know at a financing as side, year we from are the the financing that's there on sales as the the next next help digital we look well will the year, us to And sales. of drivers side we're about Conn the

be So model the for of to what next only speaks is power impact and sales business we XX% at and the year. to our opportunity be believe of down what same-store XX.X%

Lee Wright

add important one in on the category to saw an but improvement pleased which also And a category. appliances strength has just been clearly with furniture thing specific matters, in the basis is we're we

that see were So progression. to we pleased continued

Rick Nelson

where And any behavior? the have Can shopping? avoid these in store you stand and there, the change recent recommendations you from seen e-commerce in the penetration, customer CDC speak you to to

Lee Wright

enter a -- into question are certainly reluctant more showroom. that we there's Rick, to no customers

at that a pleased our to we our again, think months, have we were of overall significantly the think if shopping to grow think see as obviously, we to to accustomed X% growth ability customers last e-commerce. from for more opportunity, about we that balance have in significantly we So opportunity we're get today e-commerce by the online. multiples unique basically and you But sales XX grow e-commerce

options, and omnichannel that we channel and we -- an they prepared to As investing continue we're in or that's invest the you unique be really want offer us as the significantly. customer to guys be we there think online whether retailer going know, and we've our have have broader which our an And showroom, we said spectrum to for certainly we for started ability that in invest my to shop of important been and to I have financing will customers. our to remarks,

Rick Nelson

Difficulty] to think you is? widening And out, especially it recent things the loss then if what a Difficulty] bit your like better credit are and shake you data [losses] in [Technical looks expectation where to could are comment, side shifting going and the [Technical

Lee Wright

'XX Rick, discussed vintage, where that we knew I going to we think we've had and higher from about obviously would risk in which there. previous higher we clearly, you're talked were looking have we for calls some FY we obviously and that, the charge-offs

is the included Clearly, we rates, that in can higher of getting. things which we important interest think table, that did progression. think One though, we're the we as the see yield about you

to it. offsets Chief clearly, talked credit we that able maintain Officer. of things from think level Credit risks. board, our talked prepared we being approve on again, a is remarks, that So but in I as got about we've But perspective about some very the my more exciting. [TJ] doing And We're

So have we're we about what forward. going excited

As tell have credit with But reserving know thing loss. opportunities Rick I CECL the we we're at the new clearly, pleased guess think on would forward. I and you, losses. scorecards, and unique full we looking work going And [TJ] we I focused we systems, new lifetime last with

are reserves So those incorporated.

nothing we're So going that as going full reserving really because forward, to we look see we're there's loss. unexpected lifetime

Norm Miller

at significant year. CECL Rick, the CECL and Remember of beginning took a we changed the with the

So we even for we of for those in fiscal that impacted 'XX. changes losses clearly for adequately summer back believe reserved underwriting half last we're the that, made

bode will in year. 'XX, going a fiscal delinquencies with next very, positive forward those days since the with into trends and very performance However strong for pandemic FPDs that XX

Operator

comes line Thomas with of KeyBanc question Markets. Brad the from next Our Capital

Brad Thomas

the might help the topic be time. trends to portfolio us you on backdrop indicate mean to of all that what up some what metrics late were, clearly portfolios stronger normal? benefit I would of able some get around that set I for going you follow-up had have into into sales as comfortable return in maybe sort number to more the be a before opportunity quantify could Just of degree you might has getting last to of prior or to underwriting loosen one normal a it's what you've of to guess want the kind trends. is that that customer

Norm Miller

So what [TJ] I there's of going we'll and added need size would next we you're [TJ], from resources the certain, we aggressively two that perform bodes I performance probably taking in and then at gets the Will to year. [Technical a with we there have say, a that there, is little sales. not amount there's a same-store both as coming in six that we as well out we opportunity the to to still able Brad, What mean, normal believe will the have that we've right. start go as taken portfolio, lease anytime just believe as one, last our to of early we cut material next house, that well are it of as don't and standpoint, own risk XX%? the both be greater world's come more But be half there to expectation for to maybe and of done No, as Difficulty] e-commerce, really we’re smaller of mentioned aboard part stronger longer first is more the we also we've side in the to a that side the to that than additional It Number that. non-financing standpoint, is believe or Lee a seven believe folks be well. years than after on XX% material year, things. but ever who able we've with. pandemic hopefully, positive does

Brad Thomas

to next talked you us past. not And opening store next give the year year, getting you can any you from of stores be plans about maybe openings and that going? mistaken, the George, talk color timing P&L about in And the eight to in I'm Norm, Florida might SG&A to Is the openings? continue you color of the XX to sense plan? about next still year. If the about implications how some able on those share early think And

Norm Miller

Florida Yeah, to eight right with to be start those the we the as of that the will vast be will leverage those to we -- is the the first majority A in initially new the stores half opens portion Most stuff. that the January. in year, XX stores significant Yeah, number the quarter. we're center distribution in even be first I'll targeting. of of of expect

think to be would the in we quarter. incurring I cut, that we of as ready flattish mentioned in SG&A had George is fourth on because we So quarter as get that year-over-year we're open This new part now, talk the we're expenses stores Florida.

George Bchara

And pre-opening our guidance around expenses, Brad, hasn't changed.

first some it's much relative dollar something SG&A per opening. this this XX But to because of new won't basis in a nine But the year, preceding basis, as SG&A. remember, here year that eight the going at of cuts $XXX,XXX around place you on stores back stores year be the higher next you're year store of an six months have now we So of still a in we're half now year-over-year year. put started we $XXX,XXX the to looking the as impact in to to see opening to to expect we that next cost re-spend to to would on compared see

Operator

Company. Our the next Nagel with comes Brian of & Oppenheimer line question from

Brian Nigel

little with question environment foregoing been idea Is they not and financials. would to a The Brad's -- on the another have yourself the the from customers with or question risk maybe get be I run as standards. you too. may where some -- a the on But distance bit the Rick you you're more then sales. there question questions Any aggressive so have, congratulation, lendings you're having we’ve the I think lending disappointed sales is, tight, follow So allows up as I those is, first And that return? significant sales the seen going? you your off, those to of your there benefits lendings that tighter there's to

Norm Miller

a customers another retailers as can that far a to regarding own those or well options as either have a own cash, from lease number limited. to… in to don't go first a to question, And store They have opportunity store. The the financing fairly then you get standpoint, lease to retailers really have their they can that standpoint. cheaper our are item question a approved And from own want very options -- are financing lease they as off, as own you of that or Conn rent they know, typically option as big box to a a of second to they to not Lee, well, would number go

Lee Wright

to And regards importance about to back with Brian, clearly, go we why talked the -- it’s the LCO. of to just

needed best have you come we the there as know customers to well. disappointed That's one are is as remarket goods. maximizing them as additional to extent those mentioned You on financing they know and declining with we're piece. I well. offer but we will class we're their out And to then we have, solutions solution more, we partner I that existing testing with but we the And working our which clearly, customers prepared in mentioned that very as we for think fact some sure, for I my the back sure that remarks, ability that want and to opportunities that we're make closely obviously client the making home

can appropriate giving mean, sure them an make I track it. them we're to experience back. so that want keeping we of that We're bring we So

those touch well. a we long do digital news, stay bring to especially marketing customers them good question, time. good with and fold around is But in the to we’ll we've So a back believe, been with for But our Brian. it obviously as

Norm Miller

the And into well, at their have I'm of really on sales that recognize the at, that do and as to that said, firmly frankly, XX% and it confident else. year. And been they we we're we we've APR of north finance they the Lee someplace own. lease get balance to coming and don't they the disappointed our believe offer in own -- XX% and why with very option we here to And lease balance will sale want if to as

Brian Nigel

you follow would Then find think in And taken the some reduced that it XX%, is simple? Lee, XX%. went be your that mean plus comps have actions that comp does you are your supply understand up, with math. constraints so I sales about just But by factors those one and comments, the quick and XX%, without just prepared said down you’ve I

Norm Miller

No.

Operator

Our comes with Carr line the of next question Ryan Jefferies. from

Ryan Carr

to out impacts performance, positive to-date the this definitely year. on Congrats credit it's shown

adopting the lease more you Just first -- Synchrony. as side, are own me, question as from to going along are well you obviously,

little out Just where a under in you going terms is of is last be, think XX%. to where curious where shake percentage bit it'll your quarter Conn’s financing of --

This quarter you're XX%.

you'll So really your really be account the own to lease think where share taking running into book financing? from you the XX% part of

Norm Miller

just our a been been standpoint to we've So Historically, long number, the a about as than of we as cautious but the high underwrite percentage financing we this pie. the grow it's Having not the comfortable reallocate pie to a goal high it Conn what putting most up not very overall. being as because being are really so we're quarter, for said I’ve was is even and in -- pie XX% XX the -- giving Because importantly, pieces over within that with risk from comfortable the more to XXs. that certainly can with targeting as or very place, we're set been with XX. very

opportunity those the at customers. standpoint. cash But appropriate comfortable the percentages with Synchrony time we're growth So from same think in-house on we risk

at over the business of cash versus or the was business pre-COVID, approximately. combined, it it's the XX% If of quarter, customers thereabout almost and XX% last you Synchrony look

fall higher we of from as it as financing do certainly to really we're that percentage We'll whatever stay have and here's number a would comfortable Conn can't there. and with over should because the that what may. next the in standpoint, move with business appropriate up we the house comfortable expect But I than significant financing let year XX% that financing the whether can at level? will we We're ongoing So an out marketing there the saying why I after want of play basis. that's with let customer a opportunity long wants be. And Because the on going percentages to put they that risk. it

Ryan Carr

record the that date a collections the from I same cash as mean, that? And or you you regard, cash trends year-to-date. on you saw are well, guess to see do same what that then I seeing perspective, you within performance purchase in observed have

Norm Miller

things. but party and at we're the said which our level generating well. as as combination portfolio include mean, As more third to cash the is not well, from own standpoint collecting also only lease one, cash transactions before, of I cash collecting and collecting two a a cash -- Number I from higher Synchrony but collection

Lee helps see see impact I And even nicely that quarter on that significantly. cash which of continue we in know comments, fourth year, to performance and standpoint above into on cash going as collections his all it quarter we collected. a XX mentioned from the year So the the to at in perform high prior we're as that, certainly and of third you think a portfolio continue

Ryan Carr

And from quarter. what the portfolio or were just the or is me, I function to lower a up last balance bit increase quarter the delinquencies that caused really a decline, there? one of mean

Norm Miller

things. of couple a really It's

quarter First, seasonality declining portfolio it's a wise, effect order standpoint. is are dollars the of the the really but the dollars XX is at going day down. highest XX down from delinquency the driver. then are things, than third day typically faster rate denominator quarters primary And is actually a the

Lee Wright

million a from looking $XX a as up it's seasonal QX. QX Ryan, year-over-year only is million to well, know, last about perspective, you impact dollar which And going year versus as as you And see well. $XX from

Operator

line Compass the Bill from of comes question Ryan next Point. with Our

Bill Ryan

provision, level up allowance A looks to when I of question high. adopted closer now. looking right you on CECL. fairly under and allowance you're receivables, just back XX% The holding know about the the of reserves XX% -- XX sort be to

not way drift lower beginning fair receivables things. where rate kind see on of of and of I tight mentality Just kind new than the level its the going wait be one that was is everything's to origination the will credit the reserve working eventually in have, provisioning with at going or you that standards might to forward the it mean, way of assume I it's year? perform the through how knowing it guess a But looking it that another. at

Lee Wright

as of Yes, allowance over lower The rate that where forecasted Bill, finnacing is a -- a is that got with still sheet reserve unemployment the seen one over drift balance the assume with associated long increase will rates. balance is factor, sale we've before. higher out, it down fair pointed time the we've you quality with below as key to was significant a that the fact Conn underwriting, it much significantly term on in the

ex drift that's where actually to factor so start adopted we down below the see they when of And will reserve whether terms CECL. were when in the percentages we

Norm Miller

only know, derisk as you portfolio. Not the materially balances to higher in our our TCR And in those reserved proactively reages percentages as that, you And down Bill, that the addition, we've and rates. well. as comments, at think, are done I aggressively heard and are and coming

well. a result provision to come So ultimately allowance in and focus we down as and those there as balances that lower continue will

Bill Ryan

provision little granular just follow And the on the but up quarter. bit one more a in

of lower, little rate. couple one higher, was benefit factors a little the one bit a there's a of but is kind being mentioned, You it unemployment push lower

two a is out, to that a use quarter? fair those of net, they putting like, those of to you mean kind wash factors the If kind relative originations the kind number the were on books net you're for provision two the net of on

Lee Wright

was it from a basis. primary on two about the quarter-over-quarter, wash quarter the driver the were Bill, the The so flat a quarter. portfolio [indiscernible] of you decrease factors relative look a when at in allowance allowance rate

Operator

back like for questions. hand his no to Miller Mr. are the call to There I'd remarks. closing further

Norm Miller

Thank you. fourth and to talking look interest company, you. Happy a of Holidays. our the Christmas and to everyone in Merry appreciate everyone conclusion at Wishing forward everyone's Thank We the a quarter.

Operator

Thank participation. conclude Ladies and you teleconference. does gentlemen, your this today's for

your disconnect have lines time may wonderful at You a day. and this

Conns (CONNQ) 8 Dec 202021 Q3 Earnings call transcript