Conn’s names new CFO as Q1 disappoints; will open 10-12 stores
Specialty electronics and furniture chain Conn’s Inc. is shuffling its executive ranks as it swings to a net loss in the first quarter of fiscal 2017.
Lee Wright, formerly CEO for oil field service firm Professional Directional Enterprises Inc., will succeed Tom Moran as CFO, starting on June 22, 2016. Wright also has experience in the private equity industry. Moran, who joined the retailer in July 2015, is expected to remain at the company for a period of 120 days to support a seamless transition.
"Tom has helped position our financial organization for long-term success and we are grateful for his contributions," said Norm Miller, chairman, CEO and president of Conn's. "We wish him all the best in his future endeavors."
The company also promoted Michael Poppe from executive VP and COO to president and COO of Credit and Collections. The title of president recognizes Poppe's growing oversight of the credit operation. In addition, Mark Prior has been named general counsel and corporate secretary, effective July 14, 2016, and named John Davis chief credit officer in late May.
During the first quarter of fiscal 2017, Conn’s reported a net loss of $9.75 million, compared to net income of $16.07 million the same period a year earlier. A significant increase in total costs and expenses, including selling, general and administrative (SG&A) expenses and provisions for bad debts from the company’s credit business, helped push results into the red.
Total revenues fared better, with new store openings helping to drive sales of $319.04 million, up 7% from $298.63 million. The revenue gain was partially offset by a same-store sales decline of 1.3%.
“Our results this quarter reflect the transition we are undergoing this year to transform our credit business,” said Miller. “We have a strong, differentiated retail model that delivers an excellent value to our customers. Our work the past few years to revitalize our retail operation was highly successful, but changes in the underlying behavior of our customer base exposed the need for increased investment in credit risk management. We are temporarily slowing the pace of growth to allow us to implement strategies to turn around our credit segment's financial performance. It will take several quarters before the benefits of these efforts begin to meaningfully impact our reported results.”
Conn’s, which opened five new stores during the quarter and currently operates 108 stores, expects to open 10-12 more new stores during the rest of the fiscal year. Other projections for fiscal 2017 include total revenue growth in the low-to-mid single digits and same-store sales to range from down mid- to low-single digits.