The stock price of Conn’s, Inc. (NASDAQ:CONN), a specialty retailer of durable consumer goods declined almost 31% to $31 per share after reporting weak financial results for the second quarter.

David Einhorn’s Greenlight Capital owns 3.5 million shares of Conn based on its second-quarter 13F filing with the Securities and Exchange Commission (SEC), making Einhorn one of the largest shareholders.

In a recent letter to investors, Greenlight Capital revealed that it acquired its stake in Conn’s, Inc.(NASDAQ:CONN) at an average price of $35.49 per share.

The hedge fund believed that the specialty retailer has a potential for a 15% to 20% unit growth. At the time, Greenlight Capital noted that stock price of the company dropped significantly from $77 a share because the market overreacted to moderately bad news. Greenlight is up 4.8% YTD (through August), as previously reported by ValueWalk.

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Conn’s, Inc. (NASDAQ:CONN) Second-quarter financial results

Conn’s reported that its second-quarter adjusted earnings were $0.50 per diluted share, down from $0.52 in the same period a year ago. Its consolidated revenues rose 30.4% to $353 million. Wall Street analysts expected the company to generate $353.9 million in revenue.

The specialty retailer said its same-store sales increased 11.7%, and gross margin climbed 250 basis points to 40.8%.

According to Conn’s, its adjusted retail segment operating income rose 39.1% to $35.7 million, and credit segment recorded an operating loss of $0.2 million.

In a statement, Theodore M. Wright, chairman and CEO of Conn’s, Inc. (NASDAQ:CONN) said, “Overall results were not satisfactory. Our credit operations ran into unexpected headwinds, resulting in portfolio performance deterioration. Despite tighter underwriting, lower early-stage delinquency and improved collections staffing and execution, delinquency unexpectedly deteriorated across all credit quality levels, customer groups, product categories, geographic regions and years of origination. Tighter underwriting and better collections execution did not offset deterioration in our customer’s ability to resolve the delinquency.

Conn’s, Inc. (NASDAQ:CONN) Business outlook

For the full fiscal 2015, Conn’s reduced its adjusted earnings estimate in the range of $2.80 to $3.00 per share, down from its previous guidance in the range of $3.40 to $3.70 per share.

The company explained that its latest full-year guidance reflected the impact of higher expected provision for bad debts and the issuance of $250 million in 7.25% senior notes in July 2014.