🧠 At a Glance:
Conn’s Inc. (NASDAQ: CONN), the furniture and electronics retailer that often feels like the RadioShack of living rooms, posted its Q1 FY25 results. And let’s just say — the numbers are not giving “Home Comforts.” Revenue down, losses still deep, and store closures lurking.
- Revenue: $280.8 million (↓14.5% YoY)
- Net Loss: $32.9 million
- Retail Segment Loss: $6.4 million
- Credit Segment Loss: $26.5 million
- Active Customers: 444,000 (↓13.8%)
🪑 About the Company:
Conn’s, Inc. operates over 380 retail locations offering home appliances, electronics, furniture, and a lease-to-own model. Their customers? Typically subprime credit buyers — meaning Conn’s also runs its own mini finance company. High risk, high margin… or just high stress?
👥 Key Management:
- President & CEO: Norm Miller (yes, he’s back as interim CEO)
- CFO: Chandra Holt (resigned recently; always a bad sign)
- Board Alert: The company is restructuring leadership. Translation: panic mode.
📉 Financials – Q1 FY25 Breakdown:
| Metric | Q1 FY25 | Q1 FY24 | YoY Change |
|---|---|---|---|
| Total Revenue | $280.8 million | $328.7 million | ↓ 14.5% |
| Net Loss | $32.9 million | $25.2 million | ↑ Loss |
| Retail Gross Margin | 33.6% | 34.6% | ↓ 100 bps |
| Credit Segment Loss | $26.5 million | $18.5 million | ↑ Pain |
- Store count: 381 stores as of April 30, 2025
- New stores opened this quarter: 0 (that says a lot)
🪫 Fair Value Range:
With ongoing losses and uncertain consumer financing conditions, we peg a forward fair value range at $2.00–$3.50, unless it pulls a miracle M&A exit.
CMP as of last filing: ~$3.02
📈 Growth & Outlook:
- Management is “focused on reducing SG&A” and “rightsizing the store footprint.”
- Translation: fewer stores, fewer people, less overhead, and praying that delinquency rates don’t balloon further.
- Credit portfolio quality has been deteriorating — not great when your entire business is built around giving risky loans for recliners.
💥 EduInvesting Take:
Conn’s feels like a company trying to sell you a washing machine while drowning in its own dirty laundry. Shrinking customer base, expanding losses, and CEO musical chairs don’t inspire confidence. Unless it pivots hard or sells itself off, it’s a slow fade to irrelevance.
🚩 Risks & Red Flags:
- Credit portfolio charge-offs rising (8.8% vs 7.2% last year)
- No real e-commerce edge
- Management turnover like a soap opera
- Consumer credit stress = a death sentence for their business model
