Shares of Texas appliances and electronics retailer Conn's
Conn's reported six-month revenue growth of more than 14%, as the company brought in some $272 million. Same-store sales were up 5.6%. Net income, meanwhile, rose more than 54%. The company credited some of its sales and profit increases to expanded credit promotions. It may be that a reason the company's shares fell somewhat yesterday despite its growth numbers was concern that the company may be taking on extra credit risk by giving iffy customers extended terms.
That said, credit management is one of the key tenets of Conn's differentiation strategy -- and the company clearly takes it seriously, as evidenced by the up-front discussion of the matter in an earnings release. And Conn's is an interesting company despite that. It's profitable, growing, and last year managed to throw off some free cash flow -- somewhat unusual among up-and-coming retailers that are typically throwing lots of money at store growth.
But Conn's is also interesting for other reasons. It's primarily an appliances and home electronics retailer, putting it in a marketplace that includes Best Buy
The company believes its mix of credit availability, service (including both sales and product repairs) and strong brands gives it a foothold in a crowded space. Some super high-end electronics peddlers have had difficulty lately, but Conn's is holding up. Further demonstration of sales, same-store sales, and profit growth would ice the cake.
Fool contributor Dave Marino-Nachison doesn't own any of the companies in this article.