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Conn's Q4 Profit Surges, Lifts FY14 Earnings View; Shares Climb - Update

Durable consumer products retailer Conn's, Inc. (CONN) Wednesday said its fourth-quarter profit more than doubled from last year as total revenues grew about 10 percent, boosted by its retail and credit operations. Adjusted earnings per share, excluding items, missed analysts' expectations, while revenues came above view.

The company also lifted its earnings per share guidance for the fiscal year ending January 31, 2014. The shares are up about 7 percent in the morning trade.

Theodore Wright, chairman and CEO of the company stated, "Continued revenue and profitability improvement in our retail and credit operations generated record fourth-quarter and full-year results."

In Retail segment, revenues increased 9.7 percent from last year. Retail gross margin improved 720 basis points to 36.9 percent, reflecting benefit of sale of higher price-point, higher-margin goods, and sourcing opportunities. Credit segment revenues climbed 14.5 percent from the prior-year quarter.

In the fourth quarter, the company's net income climbed to $17.67 million or $0.50 per share from $7.7 million or $0.24 per share in the previous year.

On an adjusted basis, earnings per share were $0.54, while the company posted $0.34 per share last year. On average, eight analysts polled by Thomson Reuters expected the company to earn $0.56 per share for the quarter. Analysts' estimates typically exclude special items.

Total revenues for the quarter grew 10.4 percent to $250.34 million, which also came above analysts' estimate of $246.91 million.

Same-store sales were up 7 percent, compared to a growth of 12.1 percent last year.

For the fiscal year ending January 31, 2014, the company now expects adjusted earnings per share to be in the range of $2.40 to $2.50, up from the prior outlook of $2.05 to $2.15 per share. Eight analysts project annual earnings per share of $2.09.
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Same stores sales are expected to be up 3 to 8 percent. Earlier, Conn's expected same stores sales to increase in the range of 0 to 5 percent.

The company noted that its newly opened five Conn's HomePlus stores are performing well and it plans to open 10 to 12 more over the balance of fiscal 2014.

CONN is currently trading at $38.42, up $2.34 or 6.49 percent, on a volume of 1.29 million shares, against a three-month average volume of 476 thousand shares.

by RTTNews Staff Writer

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