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Conns Meets on the Top Line, Misses Where it Counts

By Seth Jayson - Updated Apr 10, 2017 at 1:56PM

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Just the facts, Fool.

Conns (Nasdaq: CONN) reported earnings on April 3. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Jan. 31 (Q4), Conns met expectations on revenues and missed estimates on earnings per share.

Compared to the prior-year quarter, revenue grew. Non-GAAP earnings per share expanded significantly. GAAP earnings per share increased significantly.

Margins increased across the board.

Revenue details
Conns chalked up revenue of $250.3 million. The seven analysts polled by S&P Capital IQ expected revenue of $251.1 million on the same basis. GAAP reported sales were 5.2% higher than the prior-year quarter's $237.9 million.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.54. The eight earnings estimates compiled by S&P Capital IQ averaged $0.55 per share. Non-GAAP EPS of $0.54 for Q4 were 59% higher than the prior-year quarter's $0.34 per share. GAAP EPS of $0.50 for Q4 were 117% higher than the prior-year quarter's $0.23 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 47.6%, 350 basis points better than the prior-year quarter. Operating margin was 13.4%, 600 basis points better than the prior-year quarter. Net margin was 7.1%, 390 basis points better than the prior-year quarter. (Margins calculated in GAAP terms.)

Looking ahead
Next quarter's average estimate for revenue is $228.1 million. On the bottom line, the average EPS estimate is $0.43.

Next year's average estimate for revenue is $1.01 billion. The average EPS estimate is $2.08.

Investor sentiment
The stock has a one-star rating (out of five) at Motley Fool CAPS, with 293 members out of 347 rating the stock outperform, and 54 members rating it underperform. Among 120 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 99 give Conns a green thumbs-up, and 21 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Conns is buy, with an average price target of $35.13.

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