Executive Summary

Q2 FY2024 revenue was $0.307B, down 11.5% y/y, with diluted EPS of $(1.39); sequentially, revenue improved from $0.285B in Q1 and EPS loss narrowed from $(1.47), driven by higher retail gross margin and improving sales trends in in‑house credit and lease‑to‑own offerings .
Retail gross margin expanded 230 bps y/y to 36.9%—the highest in seven quarters—supported by pricing/assortment actions, product mix, and normalizing freight; eCommerce hit a Q2 record $27.2M (+41.5% y/y) .
Credit quality remained broadly stable (60+ DPD 11.1% vs 11.0% y/y), but credit provision rose to $33.3M (from $27.2M) and interest expense remained elevated ($16.8M), weighing on profitability .
Liquidity actions included a $50M delayed‑draw term loan and a $273.7M ABS transaction completed shortly after the quarter, lifting immediately available borrowing capacity to $231.1M at quarter‑end .

What Went Well and What Went Wrong

What Went Well
- Retail gross margin expanded to 36.9% (+230 bps y/y), the best in seven quarters, on pricing/assortment, mix and lower freight costs .
- eCommerce sales grew 41.5% to a Q2 record $27.2M; applications increased 30.6% y/y, improving in‑house credit sales for the first time in six quarters .
- Management emphasized focus on core credit‑constrained consumers and turnaround initiatives: “Strategic initiatives…are taking hold…record quarterly eCommerce revenue…30.6% increase in applications…” — Norm Miller, Interim CEO .
What Went Wrong
- Consolidated revenue fell 11.5% y/y; same‑store sales (SSS) declined 15.4% despite sequential improvement, reflecting softer discretionary spend for home goods .
- Credit provision increased to $33.3M (from $27.2M) and credit segment swung to a $(4.5)M operating loss (from +$7.9M), on higher net charge‑offs and lower credit revenue .
- Interest expense more than doubled y/y to $16.8M, pressuring bottom line amid higher funding costs; net loss was $(33.5)M vs +$2.1M y/y .

Financial Results

Metric	Q4 FY2023	Q1 FY2024	Q2 FY2024
Total Revenues ($USD Billions)	$0.335B	$0.285B	$0.307B
Diluted EPS ($)	$(1.79)	$(1.47)	$(1.39)
Operating (Loss) Income ($M)	$(33.4)	$(20.7)	$(15.4)
Interest Expense ($M)	$13.1	$16.4	$16.8
Net (Loss) Income ($M)	$(42.8)	$(35.4)	$(33.5)
Retail Gross Margin (%)	33.7%	33.5%	36.9%

Segment performance

Segment	Q4 FY2023	Q1 FY2024	Q2 FY2024
Retail Revenues ($M)	$270.8	$224.0	$246.3
Retail Operating (Loss) Income ($M)	$(19.5)	$(19.7)	$(10.4)
Credit Revenues ($M)	$64.1	$61.8	$63.1
Credit Operating (Loss) Income ($M)	$(13.9)	$(0.8)	$(4.5)
Provision for Bad Debts ($M)	$44.1	$28.9	$33.3

KPIs

KPI	Q4 FY2023	Q1 FY2024	Q2 FY2024
Same‑Store Sales (y/y)	(21.8%)	(20.1%)	(15.4%)
eCommerce Sales ($M)	$24.2	$22.7	$27.2
Applications Processed (#)	278,249	293,831	341,118
% Retail Sales via In‑House Financing	56.8%	59.1%	62.2%
60+ Days Past Due (% of portfolio)	12.7%	11.6%	11.1%
Weighted Avg Origination Score	620	618	623

Consensus vs. actual for Q2 FY2024

S&P Global consensus for revenue and EPS was unavailable via the estimates tool for this ticker at the time of analysis; estimate comparisons cannot be shown. Values would ordinarily be retrieved from S&P Global.

Guidance Changes

No formal numerical guidance was provided in the Q2 FY2024 materials reviewed.

Metric	Period	Previous Guidance	Current Guidance	Change
Company Guidance	FY2024/Q3‑Q4	None	None	N/A

(Management commentary focused on strategic initiatives, margin actions, credit risk management, and liquidity; no quantified revenue/margin/tax/OpEx guidance disclosed.)

Earnings Call Themes & Trends

(Note: The Q2 FY2024 earnings call transcript could not be retrieved due to a document database issue; themes below draw from Q4 FY2023 and Q1‑Q2 FY2024 primary releases and may be updated when the Q2 transcript is accessible.)

Topic	Previous Mentions (Q4 FY2023, Q1 FY2024)	Current Period (Q2 FY2024)	Trend
Focus on core credit‑constrained customer	Re‑focusing efforts; in‑house LTO launch; applications up 9.7% in Q1	Strategy “taking hold”; applications +30.6% y/y; first positive in‑house credit sales in six quarters	Improving
eCommerce platform and growth	Platform conversion completed; record Q4 and FY eCommerce sales	Q2 eCommerce record $27.2M (+41.5% y/y)	Improving
Retail gross margin actions	Q4 GM 33.7%; deleverage offset by mix	GM 36.9%, +230 bps y/y on pricing, mix, freight	Improving
Credit quality and provisioning	Higher provisions in Q4; 60+ DPD 12.7%	60+ DPD 11.1% (stable); provision $33.3M (up y/y)	Mixed (stabilizing delinquencies; higher provision)
Macro/home goods demand	SSS pressure on discretionary spend	SSS (15.4%); sequential SSS improvement vs prior quarters	Gradual improvement from trough
Liquidity/capital markets access	Term loan in Feb‑23; ABL availability	$50M delayed‑draw term loan; $273.7M ABS; $231.1M avail. capacity	Strengthened

Management Commentary

“Strategic initiatives focused on turning around our retail performance and better serving our core credit‑constrained consumers are taking hold…record quarterly eCommerce revenue…30.6% increase in applications…resulted in an increase in sales financed through Conn’s in‑house credit offering.” — Norm Miller, Interim President & CEO .
“Retail gross margin grew 230 basis points…as we benefit from pricing and assortment changes…a more profitable product mix and normalizing freight costs…credit quality remains stable and in line with our expectations.” — Norm Miller .
“Under Norm's leadership, the Company has quickly moved to stabilize performance…return to a strategy focused on serving the core credit‑constrained customer is turning around retail performance…well positioned to create lasting value for shareholders.” — Bob Martin, Lead Independent Director .

Q&A Highlights

The Q2 FY2024 earnings call transcript could not be retrieved due to a source database inconsistency; as a result, Q&A themes and clarifications are unavailable and will be updated when the transcript becomes accessible. Conference call logistics were disclosed in the press release .

Estimates Context

S&P Global consensus estimates for Q2 FY2024 revenue and EPS were unavailable via the estimates tool for this ticker (missing mapping); therefore, we cannot provide versus‑consensus comparisons at this time. We will update this section once the S&P Global mapping is restored.

Key Takeaways for Investors

Sequential improvement: revenue and EPS loss improved from Q1, supported by a 340 bps two‑quarter lift in retail gross margin (33.5% → 36.9%) and stronger eCommerce performance .
Early traction in core strategy: applications +30.6% y/y, in‑house financing penetration up to 62.2%, and lease‑to‑own momentum suggest improving conversion with target customers .
Credit stabilizing but costly: delinquencies steady (60+ DPD 11.1%), yet provision increased and credit segment posted an operating loss; credit costs and funding remain key profit swing factors .
Elevated interest expense is a headwind: $16.8M in Q2 vs $6.8M y/y, underscoring the importance of ABS execution and balance‑sheet actions to reduce funding costs over time .
Liquidity enhanced: $50M delayed‑draw term loan and $273.7M ABS boosted flexibility; immediately available borrowing capacity was $231.1M at quarter‑end .
Demand backdrop still soft but improving: SSS down 15.4% y/y, yet the third consecutive quarter of sequential improvement indicates stabilization from last year’s trough .
No guidance: management did not issue formal numerical guidance; monitor subsequent updates (including transcript and later filings) for any quantified targets .

Appendix: Retail Category Mix (Q2 FY2024)

Category	Net Sales ($M)	% of Total	y/y %	SSS %
Home Appliance	$90.6	36.8%	(25.0%)	(27.2%)
Furniture & Mattress	$81.3	33.1%	(5.9%)	(10.2%)
Consumer Electronics	$26.9	11.0%	(15.4%)	(17.7%)
Home Office	$9.0	3.7%	+1.4%	(1.1%)
Other	$17.0	6.9%	+122.3%	+100.6%
Repair Service Agreement Commissions	$18.8	7.6%	(13.2%)	(14.3%)
Service Revenues	$2.3	0.9%	(7.1%)	—

Notes

There were no non‑GAAP adjustments for Q2; adjusted EPS equaled reported EPS of $(1.39) for the quarter .
Liquidity snapshot at quarter‑end: $181.1M ABL availability plus $50.0M delayed‑draw capacity; unrestricted cash $8.6M .
Store count reached 175 after opening four standalone stores in Q2; plan for 10 standalone openings in FY2024 .

Sources: Q2 FY2024 8‑K press release and exhibits (Aug 30, 2023) ; Q1 FY2024 8‑K press release and exhibits (Jun 1, 2023) ; Q4 FY2023 8‑K press release and exhibits (Mar 29, 2023) .

CONNS INC (CONN)·Q2 2024 Earnings Summary