Conn’s Stock is Getting Cheap

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Specialty store for electronics, home appliances and furniture Conn’s (NASDAQ: CONN) Shares have lost (-60%) to date in the 2022 bear market. Inflationary pressures, supply chain disruption and rising logistics costs are some of the headwinds that are steaming the regional retailer. of household products. The company enjoyed repressed demand pressures as stimulus money was spent on household products. However, reversal was expected as stimulus payments dried up. The company is implementing a in-store partnership in a store with the Belk department store chain. Each location will range from 10,000 to 25,000 square feet. Conn’s expects to open 10 to 20 locations this year and eventually expand the program nationwide. E-commerce sales grew 71% during the quarter as the company continues to improve its digital infrastructure. Conn’s continues to accelerate its digital transformation as it plans to integrate its acquired leasing platform for the fourth fiscal quarter of 2023 and add an additional $ 25 million in additional annual revenue by 2025. Prudent investors looking for exposure in a retailer of electronics and household items can play Look for opportunistic setbacks from Conn’s actions. – MarketBeat

Publication of results for the first fiscal quarter of 2022

On June 1, 2022, Conn’s released its first quarter 2022 tax results for the quarter ended April 2022. The company reported diluted earnings per share (EPS) of $ 0.25, surpassing analysts ’estimates of $ 0.17 at $ 0.08. Revenue fell (-6.6%) year-over-year (YOY) to $ 339.8 million, with analysts ’estimates of $ 360.78 million. Comparable total sales fell (-9.5%), but increased 9.9% in two years. The company opened three new Conn’s HomePlus stores in the first quarter, increasing the number of stores to 161 in 15 states with plans to open 20 to 34 new stores that will consist of 10 to 14 autonomous locations and 10 to 20 locations within a store. . Conn CEO Chandra Holt commented: “As expected, our first quarter retail performance was affected by government stimulus, the continued tightening of the third-party lease and a challenging macro environment.These trends disproportionately affected our customer access to financial sales during the first quarter, while sales to our fast and reliable customer segment increased year on year for the 12th consecutive quarter. The year-on-year costs of supply, transport and fuel have also been affected by the increase in year-on-year costs. economic conditions “.

Takeaway calls

CEO Holt gave color to the challenging first fiscal quarter, which was hit by an overlapping stimulus program, the tightening of the third-party leasing segment and worsening macroeconomic conditions. Higher supply chain costs included freight and fuel inflation, which led to a drop (-9.5%) in in-store sales. CEO Holt has been more cautious for the rest of fiscal year 2023 as economic conditions worsen. The company is still on track to achieve between $ 2,000 and $ 2.5 billion in annual revenue and a high one-digit EBIT margin for fiscal year 2025. Its customers with credit card payment options private label were affected by the macro environment. Higher fuel costs and lower retail sales resulted in lower gross margins, although they were partially offset by RSA commissions. The company is implementing cost-saving measures to mitigate the impact of lower sales. The store-to-store concept is a key strategy in collaboration with the retail chain Belk. They will add 10 to 20 more stores to Belk locations, which include 10,000 to 25,000 square feet of space. Initially, the locations will be within the Conn territories, but eventually it is planned to expand to new territories. Conn’s will launch its Phase 2 digital strategy by improving cart preferences and the buying process. The final phase of the fall will focus on making it easier for customers to apply for credit and payment options. The company accelerated its internal property lease roadmap by 12 to 18 months with the acquisition of an established property lease platform, which is expected to be implemented in the fourth fiscal quarter of 2023.

Conn's shares are getting cheap

CONN Opportunistic withdrawal levels

The use of rifle charts in weekly and daily time periods provides an accurate view of the landscape for CONN actions. The weekly rifle chart formed a reverse breakdown of the puppy in the collapse through the $ 15.55 Fibonacci level (fib). and continued to drop to a low of $ 7.87 before organizing a rally. The weekly downtrend has a 5-period moving average (MA) falling to $ 10.37, followed by the 15-period MA to $ 14.16. The weekly lower Bollinger Bands (BB) are near the $ 5.21 fib level. The weekly stochastic stops just below the 10 band, where it can bounce back to bounce or capitulate to a lower mini reverse puppy. The weekly Low market structure (MSL) buys activators in a break up to $ 10.96. The daily rifle chart is starring a rebound as the 5-period MA rises to $ 8.73 versus the 15-period MA to $ 9.36. The 50-period daily MA costs $ 13.09. The daily stochastic bounced and rolled just below the band of 20 with a mini puppy. The lowest daily BBs are flat at $ 5.54. Prudent investors can monitor opportunistic withdrawal levels at the level of $ 9.06 fib, $ 8.35 fib, $ 7.73 fib, $ 7.35, $ ​​5.95 fib and the level of $ 5.64 fib . Rising trajectories range from the $ 11.77 fib level to the $ 16.26 fib level.

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