CONN - Earnings call transcript Q4 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 January 31, 2021. My name is Daryl 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 XX, accessed opened via earnings at being March XXXX market was ir.conns.com. before website morning can release The recorded.

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

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

Norm Miller

Good morning, earnings and welcome to call. Conn's fourth XXXX quarter fiscal conference year

to and took to of we and our our supporting associates actions on digital successfully pandemic. the model focused XX with These the our and actions expanding past ability contributed our enhancing COVID-XX our resiliency business, de-risking combined navigate decisive balance communities capabilities. dedication of directly customers the while months, sheet business our Over e-commerce the our associates, and

efficient at is e-commerce and digital credit turning strategy leverage pandemic to offerings, our compete a point in-house to and We start. as We stronger, merchandising investments, positioned year brick-and-mortar changing and are enhance rapidly footprint, growth continue strong a and emerged to have and expand strategies. believe market-leading third-party off our in our market, and this the our better from a increase we in we marketing more

go accounts for We from and XX% a by and de-risking improve due increased Re-aged January Before Improving year XX% implemented initiatives, also XX, XX, to approximately rate impact several lower the highlights. sheet customer and year strategic the capital offering. last to we primarily tax XXXX. the provision more increased retail declined I XXXX ended year response position. COVID-XX sales through the credit fourth detail during wanted financial to share, payment by at our provide GAAP XXXX fiscal $X.XX accounts and fiscal approximately reduced positive quarter our discussed and weighted past operating previously had fiscal the bad January XX% as crisis, ending year. which trends credit related declined These of the the in I Fourth efforts Customer reflect monthly to the accelerated as strong to diluted outcome our on average prior prudently the by trends also in-house debts quarter. actions to positive position financed quarter days per a our year into balance in a intended earnings as XXX% benefit for XX-plus credit performance due well Act. CARES about continued

underlying approach conservative demand products. activities $XXX.X we in cash million sales by our $XXX net despite our believe the year-over-year global and fiscal for chain million. operating demonstrates continued quarter-to-quarter by underwriting throughout provided increased supply disruptions industry-wide year XXXX Same-store which In improved addition, to favorable

are the our sales our consumers. resonate of cash well retail impact positioned underwriting Since which through tighter believe same-store Conn's third-party options offset the helped strong growth sales on in-house growth and we with products going our experienced forward our beginning financed as positive. of for same-store also had January, are financing We and segment. sales partners, We sales

storm In X% the underlying of of for reflecting storm successful we over months consumer of two today's that many also Hurricane President's challenges continued approximately despite traffic had over are Day are significant and to our this retail the credit we implementation February weekend. demand strategy. through over have as encouraging same-store impacted conservative in XXXX. days put compared XXX lost Harvey growth quarter, the XXX up markets, store sales first store of selling XXXX addition, historic which a trends strong call, days initiatives on Recent into as offset our context, our To especially selling winter lost

by year's last fewer first in impacted selling year. day year was also calendar which one resulted leap The quarter this

advantage our can across able and momentum pandemic see successfully you from positive sales believe accelerating have our been to As in of trends the secular is favorable markets. take we our growth, we underway company during COVID-XX business to the reposition

in the require reduce value for capital. needs, Our our success fiscal shareholders. business less purchased of who with sales throughout larger opportunity have business also pursue capital and XXXX the With third-party less a to options we can to the of and payment addressable continue capturing sheet share cash we a These market. make our market and and stronger demonstrates risk finance balance customers year investments create non-Conn's

As crisis emerging growth and a long-term are opportunity. our a the strategy as well-defined stronger company with to foundation from we support result, robust a

of opportunities credit the growth across look the model. our strategies talked offerings. let's Conn's more my business credit have with in our So detail starting our Throughout retail about at at hybrid have tenure we uniqueness we

product financing other cornerstone model available the and strategy. affordable our unlike to financing overall offer options our to remains credit us credit customer core an base allowed has high-cost of point-of-sale established Our

in approved confidence the more our in-house During focused through risk. million the improves capture applications economic retail credit past of more believe sales on XX% with We outlook than we offering. we credit driving our year, Conn's less X.X new offering our sales financing of nearly we strategies for the and credit in-house less can in-house financed as implement

sizeable credit qualify waterfall our XXX,XXX partners. and fourth offering Our this growth helps supports continually XX% lease-to-own in-house many purchase that opportunity consumers for as we should total believe risk communicated year. the to our and not of adding made lease-to-own resale least we a we believe the goal opportunity segment should control did our over also last that these credit additional us within product, applications have at We the of have with progress lease-to-own meaningful sales. sales In represent by lease-to-own towards credit quarter,

lease-to-own record were are in the lease-to-own XX% retail of by XXXX sales X.X% increased of lease-to-own the year a sales. prior our total sales Robust of growth of has quarter total first result, our quarterly a XX% continued and over fiscal sales sales. dollars year approximately retail period As and fiscal quarter-to-date during

year sales For third-party onto from showrooms fiscal fiscal we strong year name sell the increased The XXXX, home also financed prior which in we our our products website. cash into XX% brand people experienced and and period. growth draw

believe local service from our presence, we and capabilities in-house a having addition, next-day competitors. further delivery In distinguishes us

resonating market actively larger the we Our with before are we expanded addressable than and of population consumers an pandemic. were targeting total a value proposition is

sales we retail we by result, can and are a to grow opportunities credit sub-prime serve As excited have believe our near-prime offerings, across the we we market-leading prime, and consumers.

over e-commerce Increasing prior digital upgrading fiscal enhancing year and a to which continue primarily platform, I pleased our are of capabilities become digital on past the marketing am focused increase a direct-to-consumer on resources, e-commerce year. omni-channel in drove fiscal sales best-in-class and transformation to expanding in with functionality transformation, improving our an retailer. we e-commerce made XXXX progress over the also We XXX% team, our have years. the of digital investments two our digital our the embark

last years our can choose year. ago $XX million $X where customers transact this year for how fiscal million features the that customers and believe online with that in have $XX to we million increased we time. time, on allowed over recall, e-commerce may first to as two focused financing Conn's remain sales again XXXX, you times serving to As We to X e-commerce we sales Since launched year over they in-house from double shop. over

We also at year company. the have total XXX. end fiscal fiscal the showrooms to year, strategies. new to that geographic showrooms nine to the excited key a believe growth our opened it we Last investing we surpassed the is I'm continue number since of the showrooms; of our report growing digital important our of for expansion XXX alongside in year, end milestone

plans to XX existing this a have new to nine fiscal We all open year, showrooms markets. total within of

we believe DCs, support growth fixed over several years we can strategy our In open additional the need the cost structure. to existing brick-and-mortar without our leveraging fact, next

capabilities. our pandemic, we have increased from focus emerge acumen COVID-XX we retail on and As the improving our

consumer renewed to our home-related merchandising the focus position behavior take strategies to advantage and to continue consumer and our we We further changing and of fiscal strategy current products retail enhance year. product throughout expect on

enhancing to number brands selection our appeal increasing Some customer a mattress specific and furniture the actions to reinventing as points. as by price base, well of segment our include broader

In addition, retailer. more appliance Conn's as a recognizing leading consumers are

are fiscal experienced this our the leveraging past appliance in focused we appliance result, in a our on increase As we X.X% assortment. sales year category expanding by

countertops complementary and across continue flooring, such home We pursue as fitness-related to also offerings. products opportunities

will year digital targeting X times help in will and two year. than what marketing we past our we improving advertising this We XXX% goal, investments continue years us customer are believe To digital targeted the we anticipate a this spend Finally, to over and increased higher just focused be as was marketing achieve shift more spend acquisition customer effective we in strategies. spend our our our on approach. ago be adjust and to has our

our balance our As a year repositioned you we and strategy. sheet, transformative can as our the and market de-risked see, addressable expanded company this for was business

compelling point by inflection create believe across shareholders. business. we positive growth reached our in extremely I value have our is evolution accelerating to our have am opportunity excited We our a for and plans significant an momentum and

for associates. made our dedication of and because leadership of amazing and hard work the is our service. possible continued Finally, On you team, only success of behalf thank the entire your commitment

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

George Bchara

of and originations the transformation want highlighting was balance positive flow result generated the I in a structure sheet, customer year-over-year repositioning tighter fiscal was capital including past to year. Thanks, Norm. underwriting. as million $XXX by the our portfolio the of in made finance deleveraging operating year significant our over in growth less to This increase $XXX.X our collections cash our cash on have which XXXX, a cash third-party sales, and and increase fiscal result we million The business start business strong prior from a year. the

increase in to compared debt prior We of $XXX.X to year million with XXXX have net We the flow primarily million the cash pay fiscal in year. used at ended down end debt. this operating fiscal $XXX.X

the lowest portfolio ending to to nearly end at declined In C the note since More extended we have $XX.X additional of notes have the our of Since XXXX, approximately fiscal we to Class the completed at flexibility of which provided have February, Series we at from business. increased the XX% X.X% approximately level asset-backed actions year, rate strengthened end we balance ABL representing XXXX, principal year for of XX% ABS years representing six a importantly, year and our as best amount fiscal the coupon ever XXXX years. net rate, debt advance our achieved million March balance a the of C market the amended further ago. end a facility March, percent in the the the several fixed of completed reentering of sheet. on XXXX-A manage fiscal a maturity that Class In our seven sale

our We of the of balance XXXX existing quarter. remaining million notes we called sources the complete July senior were also in expect transaction during that to of due liquidity, using this and first $XXX.X

extended can balance growth and this with long-term additional transformed in sheet, maturities; to flexibility strategies and our shareholder invest we strengthened you capital our see, business, provides opportunities have value. us pursue As debt position our our support create our that

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

the year fiscal period the of SG&A XXXX, year $XX.X nine declined expenses addition consolidated with showrooms. even prior new For million from fiscal

While focused initiatives, we first increase we to stores lap the certain and cost in in SG&A new expense crisis. full growth COVID-XX the e-commerce continue our remain and expect expense to accelerate we year response on controls, quarter we digital in reductions investments year-over-year invest and to made in as

offset RSA Looking in were decrease retrospective new at fiscal decline our a retail XX.X% and $XXX.X in X.X% more retail by growth. year. from primarily a the The by in partially retail same decrease driven quarter the sales same-store and revenues income, period lower revenue segment total detail; of commissions million, fourth store for last was

declined to sales XX% fourth quarter. tighter primarily underwriting, the credit cash transactions While by same-store of due increased third-party during sales and

momentum We one year by occurring closures overcome are far the selling as year, a year day chain store have calendar to the experiencing we the industry-wide issues. sales last due storm, we encouraged this especially due loss and winter of supply leap so are to

the remain points sales fourth our for entire we challenges year. this fiscal on year. Retail despite throughout to year as We waterfall execute margin a of the basis our continuing pursue and decrease chain XXX gross last fiscal strategies, XX.X%, across period were supply expect potential fiscal positive same-store current quarter the from growth same opportunities credit

in decline income of lower the gross retrospective decline were year-over-year margin. primary sales in-house drivers in a and a of As as financing commissions of RSA result the expected, Conn's retail

the $XX.X to fiscal lower the due basis We last and segment period sales retail on throughout year. lower year-over-year operating primarily expect margin. for retail Retail our to fiscal million continued compared margin pressure a gross was $XX.X current income on gross year, same retail million

were balance to reduction quarter. during our from fiscal Finance due credit the Turning $XX.X retrospective credit insurance fourth average receivable segment. a million period of income. last due in balance the other XX.X% to insurance our in decline same customer charges decline revenues of financing XX.X% in the a primarily was a the and year of The and commissions the decline sale portfolio. Lower to in-house

down due on expect receivables. a lower will current a the charges we year, balance For fiscal year-over-year finance basis primarily and customer revenue other to be of

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

In reduction bad addition, during quarter, allowance for to the fourth unemployment debts declined forecasted due in the a rates.

As for compared debts the million million, was for last our fourth year. quarter $XX.X period same $XX.X a bad result, provision to

to expect customer outlook. provision year, our We in of our the to balance lower encouraging current year-over-year a and economic be credit throughout primarily improvements receivables, an quality due down

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

benefit earnings per fourth $XX.X planning as with and in Finally, a the diluted for taxes CARES result Act, which we million during provision the share. income the by the discrete connection tax quarter, $X.XX recognize impacted benefited tax of by

by repositioning balance strategy. our our business, addressable have strengthening our successfully As sheet, the and COVID-XX you our we navigated market de-risking expanding crisis can see,

a from are prospects thank service and for leadership pandemic company are to growth I'm our team. as entire We excited dedication. On the stronger and the by hard direction work, continued emerging your of we our and the headed. want associates behalf I

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

Operator

Thank you.

your conducting of Oppenheimer. Instructions] session. question. coming with proceed question will from answer [Operator Brian line and We Our is first now be Nagel Please, with question the a

Brian Nagel

guys. morning, Good

Norm Miller

Brian. Good morning,

Brian Nagel

a taking Congratulations for really year. a managing job question. my Thanks nice tough on

Norm Miller

Thanks.

Brian Nagel

notes, The to follow-up at But again. looking every my first quarter to asking now. of I've ask I'm now kind been it's question, back question a going the

a regard again what the taken. at point to with you these have think -- caution would of has you've maybe with question been I in what Conn's as again, Conn's much with the -- at [indiscernible]. and in you then how just And hopefully acceleration about that to George, the look some to back Norm, retail, aggressive some held or think start ups. So how credit? is results year, crisis have conservative talked I fiscal now more alluded you early issuance at perceive of comments, do sales even your credit have sales you COVID the that, economy tight you point the you by do more second as follow I here getting pull out been and in maybe But

Norm Miller

Sure.

as very to XX%. of we've ago, back conservative with approach taken sales and this going So March Brian, year a north Conn's, impacted restricted a well financing year

would frame, new Now, we starting time during to saw been to the more that be and to risk risk. actually, economy drive when some underwriting, with modeling, better together less the and better a energy and time that with summer, be came able sales putting able so effort last significant prepared take improving, modeling we've be to we

would quarter we plus a models. restricted help that sales back sales really quarter, this strategy increased seen in limited limited acceleration to The year. standpoint first some of at sales is and XX% continued impacting and improvement the and the expect believe that up on high XX%-XX% high past second this the Conn's not Brian, that by quality, additional added balance range we've Very capture able our here not which To in realize running being highlighted basis. have pre-pandemic. consumer cash in begun partners two on testing from start is sales We to in we what credit It's really versus as in of Own the months we point. Least much still quarter those the past financing we've strong we We're Own XX% customers, the the a as financing. the under-penetrated first credit in our being driven of the Least here in but to very of the sale and call, XX% the performance of very some capturing Conn's stores. being start To It's same-store by It's by is an driven three

nice X% past cash. in-house as we credit I So extremely from pre-pandemic. high from not high we quality well. only credit Conn's significant Conn's we mindset customers as be standpoint, That the beyond. market opportunities the and balance customers a spectrum a We bullish financing for our total of credit having quality do have sale XX% we Least a Own recognize in believe sale, To our entire and and realized differentiator cash with year, of but year. the balance balance financing a us for most with a will that of take our from think changed here with risen really of Synchrony, second to we're tailwind we've advantage pre-pandemic increasing addressable start is quarter We've But standpoint, sales from the have to importantly,

on of financing to the we're that's have remain for But business. each four year. categories this Conn's grow those cornerstone in opportunity our of the the of really balance focused will and what We sales

George Bchara

I Yes, add. and Brian, would just

the in Conn's the as Own for credit current that year, cash forward quality for current the come growth the segment we've well year the success as the look maintain expect we had while To the Least customer. financing from segment, we really to As we with higher

Brian Nagel

there. all helpful. Now color I that's extraordinarily appreciate the

follow-up a could. I if quick Now,

in early obviously, the sustainability business, mentioned, last recruitments which round you've the using here you but acceleration what this that to on [ph] near about what could made is the be the and lot helping you're sales year [ph] relates of in You line? of current Conn's? the To do stimulus would seeing talked to about think of extent a fiscal again, in as how term you that factor think -- extent top maybe the

Norm Miller

this from February mentioned last as days certainly the helped stimulus March of so us. it notes. a positive It's stimulus, of January. point, in strong us comp January, or the performance we only impacted a some the We help March. well. and back days because had We in expected half to limited certainly effect XX in of has did helped the XX in had as But the in That was impact as stimulus it's have well April we to that

Brian Nagel

thank of Great, year. new very in you Best luck the much. Congratulations.

Norm Miller

Thanks, Brian.

Operator

you. Thank

Our with is the questions. next coming of proceed from your line Jefferies. Please, Joseph question with Kyle

Kyle Joseph

morning, on Congratulations good navigating guys. Hey, a challenging year.

hoping cadences a Just of just in of follow sales. terms same-store the get to up

undertook and how see in about us I I positive recognize you what really comps January sense get You and also March? to XXXX a changes in year a want February, in for sales you where same-store a guys March. leap just sense quarter Can talked that's March. the to calendar was storm the activity comp look started for lapping do versus in in I'm in stimulus just positive year trying underwriting February like to-date. and compared But give

Norm Miller

that February. implement ago Yes. it Actually March. we we the recovered. because the it volume very changes didn't of combined until we week And written storm after at in underwriting It's there end the frankly, was took, a

standpoint. sales underwriting. really days, a limited Very a few March that there's actually in year week from underwriting from no in impacted last So same-store

Kyle Joseph

in added good sounds then like there. Own. To It some it. you've partners new Got growth Least And in

it's It above been I target. has XX% that sounds think quarter-to-date. kind the of like

what With of sort partners think you do appropriate there? the is number additional

Norm Miller

quarter-to-date that about call, I I in was as we're balance standpoint. always talking of XX% at kind the would sale we've been threshold say of from for What is, a have XX% of mentioned minimum Yes, a balance believed sales and or target approximately. while the now

as unfolds the Conn's and financing, Our see don't able but financing, we focus really other to Own more is of year of capture at because sales, credit we segment. balance don't expense the on sale sales being financing not want a at Conn's this the of Least Conn's To we want expense

shift focused So, as total addressable target a the up within We we instead sales number. We to balance sales we're really really what the don't of And the grow To are growth. that's is that's in some more on the the segments of an from pie. a opposed of we're really standpoint to Least market of the focusing the believe we pie balance mentioned have XX% focused on, arbitrary dollar all standpoint, of as call. opportunity sale segments Own what want from we're on and to

Kyle Joseph

for And last me. it. Got then one one

steady in George, lot a kind there a economic were the we For the term of were trending moving But environment, us obviously give if more sense pandemic. year of can for of over allowance you time? and parts longer the picture a with allowance you state last CECL where

George Bchara

that for driven that's by both Kyle, to expect to few current going factors. come and would certainly we I Sure. year, would down and a the the dollars percent be allowance say

one terms the The the of of to to is will expectation for portfolio decline accounts that that re-aged the is days in that in balance first allowance. plus improve contributing balances, is our and the a so forth. factors XX continue fact the And of year

as to loss have you year, here through [ph] look at positive that forecasts, allowance factor the the will the the with could balance. would current to allowance improving have cycle as loan economic point on I other rate that for this unemployment benefit a And component. move or you we continue for is The

And the economic balance so expectation reduction the is both will the of current both the that portfolio be year. for and allowance drivers the those of in those factors, factor, our

Kyle Joseph

my Thanks helpful. Very for answering questions.

Norm Miller

Kyle. Thanks,

Operator

you. Thank

is from with the line Markets. of with question coming Capital Brad your Please, next question. proceed Thomas KeyBanc Our

Brad Thomas

in of on XXXX. I'm just up want my me And follow Hi. how execution I [ph] tremendous you we've you're Thanks, curious and of losses last there's the been been payment stimulus. the congratulations usual than better provisions. where thinking unrecession to you've view gone guys. uniqueness how question amount add of let about on It's some through. course, and about seen of recession that the your this a rates sort of be

about you factor I'm that, if you So how your losses? that for expectation curious think lapping into us

George Bchara

purchases Sure. FY Certainly our XXXX. XXXX from underwriting. just Having we've discretionary under since year-over-year, the has materially-tighter been year will as we less certainly down look lower were last the the tighter biggest well spending driven to the of government pre-pandemic. But over originated said by consumers March year, losses balance, that, at that been we as expectations FY additional stimulus, losses And loss driver be accounts that they regime on are benefiting going that a year. the now last for fact come have as current on our of underwriting we the to that's than expect for compared

Brad Thomas

I and there's the in same-store have inventory very to could hear help a takes puts clearly your be optimism here? way a encouraging if major to position about mean, of can a think Great. -- some in and at year. there you high-level about deeper opportunity growth going this better for sales it's underwriting, an And and trends into you that any your forward your tailwind. us Is go the

flip Of a that very good had course, some of in of side the XXXX. you're the categories on

and us those you some puts through of think high-level, at So help can more takes? a

Norm Miller

couple first. A Brad. Sure, Yes. things

at those categories. our expectation and would quality is credit with saw standpoint, and it in you a If growth filter credit high we sales Synchrony high as we a this look first, cash past sales from significant in growth not year, see

side credit-wise the expect service do where house. we on elevated are level to that at Least be of we to from the Own continue customer pre-pandemic. opportunities were To However, The an able to

a Conn's growth We expect from able over on earlier, standpoint, a standpoint. I be four there. that's And to to our build to seen as continue to what from biggest financing we've clearly mentioned past opportunity months three the

you If more the Home was standpoint, half year. strong challenging very from the of first look category-wise a Office

That be Mattress in So Those we improvements, last frame digit more that there. Conn's significantly were but are year. because time we our to smallest increases furniture headwind. heavily June-July is triple through the expect they March category, and a financing. more down the discretionary categories, saw categories,

you from those we upside in two robust, significant as the expect product have categories. have been even pre-pandemic. on standpoint, So a category to very call Appliances heard

lot as be that standpoint. I So on by a being an of challenging driven a now are have category. promotions that in maintain amount to And that much that the ASP rate. manufacturers seen say as of the improvement more going units as significant will will the from We've reduced growth rate ASP is dramatically growth

As we're I mentioned because in a well category that well so our appliance consumers. number areas has as expanding resonated assortment the with on our of call,

sales So that's we additional top, that provide believe have help pushed And to overall tailwind layer issues our the the back that you have then from were category, pressure the been there category chain that that of mitigate may capture ability going almost that a there. on the to impacted to some problem supply in exist if us half every year. or

chain in that at supply our degree least tailwinds year the which persist us challenges expectation a alleviate back half give supply of expect quarter, category. but second chain the every should standpoint almost from some in through is We to should the the that to

Brad Thomas

six more start need should here least over here in SG&A SG&A, more If That's to I the off X%. just opening at modeling about directionally the P&L thinking here? be squeeze to a from about I year the presume some stores. that going counts into little forward up Store back think How very in could standpoint with store I costs here. we great you're a helpful, one bit go Norm.

George Bchara

reflected expenses in with to our nine XX last significant to going and of technology we and the in in Certainly starting is recall point for expense here be increase compared SG&A were made our an the year stores Yes. in make that year. cuts Also that to I commerce, expectation to that's opening P&L to continue factors to contributing of an of one we this last most year. increase now, would last expense. SG&A But some factor year, that that year, will drive that other investments

year we reductions. So lap start FY those and to XXXX, this

Brad Thomas

And Or flat perhaps get that here cuts last to sales bit growth in a George, you keep of from setup XXXX? little some the the that with an per-year year, ability do of there is a deleverage leverage? store up think percentage for some of lapping to show close the or on the as sales with

George Bchara

year, I deleverage… think will this we

Norm Miller

It we year should start next be should to…

George Bchara

beyond, and year next start to leverage. But we

Brad Thomas

all, you, luck. so good Thank and Very much, helpful.

Norm Miller

Thanks, Brad.

Operator

you. Thank

Our with the question Rick proceed coming your Stephens. next from of with Nelson question. line is Please,

Rick Nelson

and Thanks and lapping The this compare my date, congrats you're April? to March, we on a very ago? February, into same-store a talk fact in about what strong quarter you year easier X% push get does can you it And results. sales do as

Norm Miller

Yes.

didn't days really we the month And year. of last, So the in so. And didn't in single -- XX February or last in force I pandemic force. was have in March come in we down standpoint, year the or last this pandemic high from the to really, don't April is combined. last But March, lapping full digits March the it and a when until February week last start really February, were full

George Bchara

last quarter. of April, started you pandemic Most recall, when in comp in the that as and underwriting. came down to we we of Rick, impacts Yes, the see XX.X% the were sales year our of type first

Rick Nelson

decline in you saw last quantify April Can that you year?

Norm Miller

again, quantify Can that Rick? you say what? sorry. I'm we Can

Rick Nelson

April the decline last that year? saw quantify you Can you

George Bchara

typically Rick, monthly first in decline year quarter out say, last the I don't was April. We driven by What is numbers. give would sales substantial

Rick Nelson

standards. Okay. underwriting about you see also, past, And curious the

those what could maybe if the color for mean and know, for you of potentially is easier results I sales? in could mean out it what the You some could the tasks provide but that lapping roll tighter same-store broadly fully fact, comps? underwriting more around you're now standards,

Norm Miller

Yes.

have modeling from modeling, we're and doing. the that we're confirming the that So the really the that testing we validating now doing estimates is

believe Own drive the have quality the customer that partner balance see To is the second other those we customers able I a what And risk. drive on Own it to during we're sales And would well. the out from do address early Conn's financing credit standpoint. amount we as the Conn's customers us We would business opportunity that believe going cash contribute year To expense our high sales gives able is To Least of partners. this important maintaining credit we will Least But standpoint. part What to with hand-in-hand though and of material it's the and and both of a risk to and with into sales opportunity level and and sale financing, closely the So we Least number less have and why we year-over-year as opportunity with beyond, what capture credit even well. our sales. is from a because with more say to a in actually of we've early of categories Again the business very financing of future knowing back can usage standpoint. forward focused. that we're work credit too to been an that say material from growing that so of works with and decline: recognize we've that's the the I is lower that That Own approval In standpoint still is high partner growing pandemic and capture we while that take project Conn's XX% to sales those in that the higher at we a quality not quality quarter materially of continue taken limits

Rick Nelson

the up, past would it to sales was proportion current this of you go, where caught Just credit year? XX% follow

Norm Miller

to little just sheet expense basically about financing the than smaller We It's stronger an remarkable growth Conn's we get had it's me, portfolio that customers, the at is want as looking I'm a to grow of pretty of bit been the I've not less seven This standpoint business is real have XX% needs also of there's putting pay dollars I having probably notes from again, the even business, sale in economic the Own. what not a standpoint or seen been and total to a cash market that dollar cornerstone, a certain focused having standpoint than any what I the bit by the growth of a in risk It's tell from issue as segments the have de-risk is, balance spectrum. the sheet quality. part the the is It's our a down across the question. outcome Rick, lot will and of be certainly To standpoint be able being on would of portfolio. categories, other be opposed future. an yield lot time in overall six seeing months not to internally in with percent a our macro Lease [ph] that frankly, years. we're the past certain we've a more an less growing able debt transformation We're target. that greater not I in smaller from percentage to been of of advantages in or of with that the we XX high sales The a year business as you've Lease don't growing end growing other overall from addressable sales company's of, an as a a as high balance credit happens of overall high probably public, I sales the of dialogue you, here. a our about on want from business. But be to categories. transformed standpoint will portfolio for was Conn's sale. financing overall well we're cash recession a Conn's grow. What years future Trust it's cash credit to as over Conn's been ultimately the in overall level. and good flow of since It those taking to it low on unknown balance will from generates because of will aggressive and by the the we do balance have up it but though the highlighted percentage What from cash the to I XXs, in argue XXs, past generate back the limits sheet the level over has other We it of is To would what being say although recession lower a Own, as revenue to say think balance but a it's if the the And be going the would what it the

George Bchara

to Rick, types don't revenue. finance across pandemic and us that add business forward, about need out really ourselves would just so expect we is we that the to our we Yes. financing think see this of going as the our for I necessarily proposition resonates that of strategically a with theme customers balanced key mix coming value more

Norm Miller

of With half our least Conn's at financing business. still being

Rick Nelson

luck. good and lot a Thanks

Operator

Thank Point. you line Ryan Bill Please, of with is your question next Compass the our with question. from coming proceed

Bill Ryan

building some about really capital line? know down morning. talked position did the good some know One, couple up, and questions. Is Everything balance in good. of the coming looks the years about Thanks you delivering thought your sort potential given you couple sounded roll future, it sheet. really cash A the it you in I bit there more return a a ago, of that you models you're earlier, you any to late answered underwriting little that about. of may in like new position have and a second cash question just little a bit you're reference March. the the out outlook And very thing, of of the done talking then a

that, clarity on some get to wanted Just you did. if Thanks.

George Bchara

yes. Sure,

in Having -- are as balance balance our e-commerce. the it in been in position time. of that, increasing So investments sheet us a strong to whether returns we continue that's in or now And sheet, investments in is see has lot than Norm from mentioned, said of better long stores, gives that a new terms flexibility. the a business

said M&A, to we continue in evaluate and to to including return the a is continue options buybacks invest share else. focus business. from anything will primary our other so shareholder And all that, Having standpoint,

Norm Miller

doing taking in limited to March expand you to around testing standpoint. tied Conn's effect to the what question will on as the a sales from very asked, later opportunities very is just the sales The start here modeling able our the really having as Bill, in a very, we're we be other first in very here a year. a doing Conn's The that limited from impact financing some we're so that had what the percentage predominantly April the a limited it is testing and very, small second testing far financing, very occur standpoint -- quarter. most to impact But last quarter, the back positioned and were we're in of confirm

Bill Ryan

you. thank Okay,

Operator

this Thank closing questions at back are like you. no I Norm to call turn any remarks. time. over There the for further Miller would to

Norm Miller

Thank you.

work company only the of note quarter, our hard First, appreciation challenging throughout I send year. a to this to want their very again, past associates out X,XXX across this not for but

your their in company we with months talking not And happened you work. interest and first the quarter Our to forward success couple pandemic also with without great a results. look we a hard would in navigating Have our appreciate have the in day.

Operator

your teleconference. for This participation. today's you Thank does conclude

this but lines a your time. disconnect day. may You Have great

Conns (CONNQ) 31 Mar 212021 Q4 Earnings call transcript