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Conn's to explore loan portfolio sale


Ongoing problems with its credit-financing business led Conn's to post a large decrease in profits for the fourth quarter.

Overall, for the fourth quarter ended Jan. 31, Conn’s reported a profit of $15.5 million, or 42 cents a share, compared with a profit of $27.7 million, or 75 cents a share, a year earlier.

The retailer said it is exploring a sale of all or a portion of its loan portfolio and will stop selling video game products, digital cameras and certain tablets.

Fourth-quarter sales rose 18% to $426.7 million, topping the $420.6 million estimated by analysts. Earnings amounted to 42 cents a share in the period, which ended Jan. 31.

The company’s credit division, which extends loans to customers, posted a wider operating loss of $11.3 million, fueled by a larger provision for bad debts. Though Conn’s has been tightening its lending standards, it continues to tout the ease of its financing to customers.

"In the fourth quarter, the retail segment expanded with new store growth and positive same store sales,” said Theodore M. Wright, Conn’s chairman and CEO. “Delinquency rates are improving; however, our provision for credit losses reflects our expectation that delinquency levels and charge-offs will remain elevated over the short-term. Underwriting standards progressively tightened over the course of fiscal 2015 and our ability to resolve less than 60-day delinquency has improved. We still have work to do to demonstrate sustained effectiveness in reducing delinquency in later stages.”

Conn's says it remains on track to open 15 to 18 stores this year, for a total of more than 100 stores.

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