Why Conn's Shares Popped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of home appliances retailer Conn's (Nasdaq: CONN  ) climbed 10% today after its quarterly results and guidance topped Wall Street expectations.

So what: The stock was crushed in 2011 on weak sales and big bottom-line losses, but another solid quarter in 2012 -- Conn's swung to a profit of $11.6 million in the second quarter versus a loss of $3.1 million in the year-ago period -- coupled with upbeat full-year guidance suggests that its turnaround momentum isn't slowing. In fact, same-store sales surged 21.5% for the quarter, fueled by a 57.5% spike in furniture and mattress sales, giving investors plenty of optimism for even more growth going forward.

Now what: Management now sees full-year EPS of $1.40 to $1.50, up from its prior view of $1.30 to $1.40, and expects same-store sales growth of 10% to 15%. "Improvements in our retail operating performance continued into August, when we experienced growth in same store sales of 12% on top of a 6% increase last year," said Chairman and CEO Theodore Wright. However, given Conn's still-hefty debt load and skyrocketing stock price (up a staggering 375% over the past year), I'd be careful about buying into that bullish talk at this point.

Interested in more info on Conn's? Add it to your watchlist.

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Try any of our Foolish newsletter services free for 30 days.

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