2023-03-29 14:18:40 ET
Conn’s ( NASDAQ: CONN ) jumped about 13% in afternoon trading, rebounding from a double-digit decline at the market open on Wednesday.
Shares of the Texas-based retailer slumped over 14% in the opening minutes of Wednesday’s session after reporting a far wider than expected loss for the first quarter amid heavy e-commerce investments. While net sales narrowly beat estimates, same store sales decreased 21.8% from the prior year quarter as home office and consumer electronics sales eroded post-pandemic.
However, as trading volume surged to over 400% of the daily average, the stock marked a sharp comeback. Shares of Conn’s ( CONN ) carried over 16% higher in afternoon trading, marking an inverse of the early move.
During the earnings presentation, CEO Norm Miller highlighted macroeconomic tailwinds set to benefit the company alongside many of the understood headwinds.
“The national average credit score in the United States in calendar 2022 was unchanged following multiple years of unprecedented credit score growth. With high inflation and growing economic uncertainty, we expect consumers' credit scores will decline in 2023 for the first time in over a decade,” he told analysts. “As a result, we believe our multiple payment offerings are needed now more than ever, and we are focused on helping provide flexible and affordable payment options to our customers.”
Additionally, Jeffieries maintained a bullish outlook on the company even after the earnings results fell short of their expectations. The team maintained a Buy rating, indicating that “the discount to total book value is hard to ignore.” Additionally, sequential improvements in margins and same store sales that were actually above their expectation as points of positivity. The firm maintains a $12 price target on the stock, still suggesting a nearly 100% upside for the stock.
Also of note, short interest in Conn’s stands at 13.27%, according to Seeking Alpha data.
Read the earnings call transcript .
For further details see:
Conn’s stock swings nearly 30% intraday after earnings