Conn's (CONN) reported earnings Tue 6 Dec 2016 (b/o)

** charts before earnings **

  

** charts after earnings **

Conn's beats by $0.11, misses on revs; Q3 same store sales -10.1%  :

• Reports Q3 (Oct) loss of $0.08 per share, excluding non-recurring items, $0.11 better thanthe Capital IQ Consensus of ($0.19); revenues fell 4.7% year/year to $376.8 mln vs the $392.61 mln Capital IQ Consensus. 
• "As a result of the rollout, all of November's Texas originations were under the direct loan program, which improved the APR on new originations to over 27%, an increase in excess of 500 basis points compared to September. We expect the direct loan program, planned changes in other states, and changes to no-interest programs will increase Conn's overall yield by 600 to 900 basis points on new originations by the end of fiscal 2018,"
• "The recent enhancements to our underwriting model affected the third quarter's same store sales by ~1,000 basis points and were the primary drivers of the 10.1% reduction in same store sales [vs. guidance for a high single digit decline]. Retail Gross Margin Strengthened 40 Basis Points Sequentially to 37.5% [vs. 36.5-37.25%]."
• "Conn's retail operation continues to perform well despite the significant impact underwriting refinements have had on sales. During the fiscal 2017 third quarter, retail gross margins improved 40 basis points from both fiscal 2017 second quarter and fiscal 2016 third quarter levels."
• The following are the Company's expectations for the business for the fourth quarter of fiscal 2017: Change in same store sales down approximately 10.0%; Retail gross margin between 37.0% and 37.5% of total net sales; Provision for bad debts between 16.75% and 17.75% of the average total customer portfolio balance (annualized).