Executive Summary

Q1 FY24 results were generally in line with internal expectations but reflected ongoing macro headwinds: total revenues fell 16.3% YoY to $284.6M and the company posted a net loss of $35.4M (−$1.47 diluted EPS) versus +$0.25 a year ago .
Retail trends were soft: same-store sales declined 20.1%, while retail gross margin contracted 100 bps to 33.5% on deleverage and higher freight; however, eCommerce delivered a 24.6% increase to a Q1 record $22.7M, and credit applications rose 9.7% YoY, the first growth in 16 months .
Credit remained a pressure point with provision for bad debts up to $28.9M on higher net charge-offs; credit revenues declined 8.2% YoY to $61.8M and the credit segment posted a slight operating loss .
Management launched an in-house lease-to-own (LTO) offering and highlighted improving sales trends in in-house and LTO segments; carrying value of re‑aged accounts decreased to $155.1M from $167.1M, indicating early portfolio stabilization efforts .
No formal guidance was provided. Near-term stock reaction catalysts include traction from in-house LTO, stabilization in delinquency/charge-offs, and sustained eCommerce growth versus continued discretionary demand weakness and funding costs .

What Went Well and What Went Wrong

What Went Well
- eCommerce outperformed: sales rose 24.6% to a Q1 record $22.7M, aided by last year’s platform conversion and application process enhancements .
- Demand funnel improving: credit applications increased 9.7% YoY—first growth in 16 months—supporting future sales capacity; management said these efforts “are improving sales trends within our in-house and lease-to-own segments” .
- Credit quality actions: carrying value of re‑aged accounts declined to $155.1M (from $167.1M), and carrying value of re‑aged >6 months dropped to $29.7M vs. $42.2M YoY, reflecting portfolio cleanup efforts .
What Went Wrong
- Core top-line softness: same-store sales fell 20.1% and total retail revenues declined 17.8% YoY on lower discretionary spend for home-related products .
- Margin deleverage: retail gross margin fell 100 bps to 33.5% on fixed distribution cost deleverage and higher freight, partially offset by mix; retail segment operating loss widened to $19.7M .
- Credit headwinds: provision for bad debts doubled YoY to $28.9M due to higher net charge-offs; the credit segment swung to a small operating loss as credit revenues fell 8.2% .

Financial Results

Metric	Q3 2023	Q4 2023	Q1 2024
Total Revenues ($M)	$321.2	$334.9	$284.6
Net (Loss) Income ($M)	$(24.8)	$(42.8)	$(35.4)
Diluted EPS	$(1.04)	$(1.79)	$(1.47)
Adjusted Diluted EPS	$(0.78)	$(1.53)	$(1.52)
Retail Revenues ($M)	$254.6	$270.8	$224.0
Credit Revenues ($M)	$66.6	$64.1	$61.8

Margins and Profitability	Q3 2023	Q4 2023	Q1 2024
Retail Gross Margin %	33.2%	33.7%	33.5%
Retail Operating Margin %	(7.0)%	(7.2)%	(8.8)%
Credit Operating Margin %	(0.4)%	(21.7)%	(1.3)%
Provision for Bad Debts ($M)	$35.1	$44.1	$28.9
Interest Expense ($M)	$11.5	$13.1	$16.4

Segment Operating Income (Loss) ($M)	Q3 2023	Q4 2023	Q1 2024
Retail Segment Op Inc (Loss)	$(17.7)	$(19.5)	$(19.7)
Credit Segment Op Inc (Loss)	$(0.3)	$(13.9)	$(0.8)

Retail Mix (Q1 FY24 only)	$	% of Total
Furniture & Mattress	$76.4M	34.2%
Home Appliance	$82.3M	36.8%
Consumer Electronics	$25.6M	11.5%
Home Office	$7.6M	3.4%
Other	$12.5M	5.5%
RSA Commissions	$16.9M	7.6%
Service Revenues	$2.2M	1.0%

KPIs	Q3 2023	Q4 2023	Q1 2024
Same-Store Sales %	(27.0)%	(21.8)%	(20.1)%
eCommerce Sales ($M)	—	$24.2	$22.7
Total Applications Processed	231,526	278,249	293,831
% Approved & Utilized	23.8%	22.9%	19.5%
Weighted Avg Origination Credit Score	621	620	618
60+ Day Delinquency % (Portfolio)	12.2%	12.7%	11.6%
Re-aged % of Portfolio	16.5%	16.5%	16.6%
Re-aged >6 Months ($M)	$31.5	$29.5	$29.7
In-house Financing as % of Retail Sales	54.0%	56.8%	59.1%

Notes: Management also reported the carrying value of re‑aged accounts declined to $155.1M from $167.1M YoY .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Company Guidance	FY24 / Q2 FY24	Not provided	Not provided	No formal guidance given

No explicit revenue, margin, OpEx, OI&E, tax rate, or segment guidance ranges were included in the Q1 FY24 materials .

Earnings Call Themes & Trends

Note: We attempted to retrieve the Q1 FY24 earnings call transcript but it was inaccessible due to a source database inconsistency, so themes are drawn from management’s prepared remarks within press releases for Q3–Q1. Q&A details unavailable.

Topic	Q3 FY23 (Prior-2)	Q4 FY23 (Prior-1)	Q1 FY24 (Current)	Trend
Macro/Discretionary Demand	Highlighted macro headwinds and lower lease-to-own sales impacting SSS (−27%)	Continued demand pressure; SSS −21.8%	Challenging macro persists; SSS −20.1%	Still pressured but comps ease sequentially
eCommerce/Unified Commerce	Focus on accelerating eCommerce as unified commerce retailer	Completed platform conversion; record eCommerce quarter/year	eCommerce +24.6% to Q1 record; further application enhancements	Strengthening
Credit Portfolio/Delinquencies	Credit spread 980 bps; portfolio cleanup ongoing	Provision increased; re‑aged >6 months improved YoY	Provision elevated; 60+ at 11.6%; re‑aged % ~flat; re‑aged CV down	Mixed; some stabilization
In-house Lease-to-Own (LTO)	Planned launch noted as strategic priority	Began originating first in-house LTO transactions	Launched; improving sales trends in in-house and LTO	Positive early traction
Cost Discipline	SG&A actions cited	Continued cost control; retail SG&A % elevated on deleverage	Retail SG&A dollars down slightly YoY; deleverage persists	Neutral—benefits offset by deleverage
Store Strategy	New stores and Belk store-within-a-store tests	4 openings, 1 closure; plan 11 openings in FY24	3 openings in Q1; plan 11 standalone in FY24	Steady expansion focus

Management Commentary

“Our first quarter results were generally in-line with our expectations and reflect a challenging macroeconomic environment.”
“eCommerce sales increased 24.6% during the first quarter. We also launched our new in-house lease-to-own offering... [which] gives us increasing confidence that the strategies we are pursuing will return the Company to growth and profitability.”
On strategic priorities in prior quarters: “Refocusing our efforts on serving our core credit constrained customers” and “launch of an in-house lease-to-own offering” .

Q&A Highlights

We attempted to read the full Q1 FY24 earnings call transcript (two indexed entries), but the source returned a database error, and the transcript could not be retrieved. As a result, Q&A highlights and any call-time guidance clarifications are unavailable from our document set at this time. We will update this section if the transcript becomes accessible.

Estimates Context

Wall Street consensus (S&P Global) for Q1 FY24 revenue and EPS could not be retrieved due to a missing mapping for CONN in the S&P Global integration, so we cannot quantify beats/misses relative to consensus at this time. If needed, we can refresh once the mapping is available.
Reported results: revenues $284.6M and diluted EPS −$1.47; adjusted EPS −$1.52 .

Key Takeaways for Investors

Demand remains weak in home-related categories, but sequential comp pressure is easing and eCommerce momentum is notable (+24.6%); monitor whether application growth (+9.7%) converts to improved ticket and traffic into 2H FY24 .
Credit normalization continues to weigh on profitability (provision $28.9M), but delinquency and re‑aged metrics show signs of stabilization; sustained declines in re‑aged balances would be a constructive signal .
In-house LTO is an important swing factor: early traction could broaden approval/penetration and support revenue recapture without outsized portfolio risk if underwriting and collections discipline hold .
Margin upside depends on volume recovery to re-leverage fixed distribution costs and continued freight normalization; track retail gross margin progression from 33.5% as a key indicator .
Funding costs are rising (interest expense $16.4M in Q1), so capital structure and ABS market access remain critical; watch liquidity headroom and term loan covenants .
Near-term trading setup hinges on evidence of comp stabilization, improved credit loss trends, and LTO scaling; absence of formal guidance elevates the importance of monthly KPIs and intra-quarter commentary .

Citations:

CONNS INC (CONN)·Q1 2024 Earnings Summary