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 Conn's (NASDAQ:CONN) were looking solid today, climbing as much as 16%, after reporting fourth-quarter earnings this morning.
So what: The home-appliance retailer's results were actually below the analysts' mark as it posted earnings of $0.74 a share on expectations of $0.78, and revenue increased 44.3% to $361.1 million, missing estimates of $362.8 million. However, investors seemed to react positively to the company's outlook and falling delinquency rate as Conn's provides in-house credit options to customers. Shares had tumbled 43% in February when the company warned about rising delinquency rates and cut its guidance, but management said the rate had actually fallen from 8.8% at the end of January, in part because of modifications in underwriting standards.
Now what: Conn's had been on a tear in 2013, with same-store sales jumping 27%. CEO Theodore Wright said that the clip would slow to 5-10% as "comparisons become more difficult," but that rate is still much better than the average retailer. Conn's also maintained its earnings guidance for the current fiscal year at $3.40-$3.70, in line with estimates of $3.51. Considering that gives the company a P/E of just 11, I'd expect shares to move higher as long as the company meets its mark.
Jeremy Bowman has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.