Stock Alert for Conn’s Inc. (CONN)
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    CONN’s swings to a Loss in Q2; Shares rally on Earnings Outlook

    CONN’s swings to a Loss in Q2; Shares rally on Earnings Outlook

    CONN’s Inc. (NASDAQ: CONN) today reported its second-quarter financial results. The company swung to a loss in its second quarter due to store-closure and loan payoff costs, which exacerbated a decline in revenue.

    For the second quarter ended July 31, 2011, the specialty retailer reported a loss of $3.43 million, or $(0.11) per share, compared with a profit of $1.61 million, or $0.06 per share reported for the same period in the previous year. However, excluding one-time items, the company’s second-quarter earnings increased to $0.17 per share from $0.06 per share. Second-quarter revenue, meanwhile, fell 13% on a year-over-year basis to $184.4 million.

    The consensus forecast was for the company to report earnings of $0.11 per share on revenue of $185 million.

    CONN’s also managed to improve its margins in the second quarter. The company’s retail gross margin improved from 25.7% to 28.9%.

    Commenting on the second-quarter financial results, Theodore Wright, chairman and CEO of CONN’s, said that while softer industry conditions resulted in sales slightly below expectations, the changes made to date position the company to drive improved profitability.

    The company is expecting full-year earnings to come in between $0.65 per share and $0.75 per share, which is well above analysts’ estimate of $0.54 per share.

    Stronger-than-expected earnings outlook lifted shares of CONN’s in today’s trading even as the company swung to a loss in the second quarter. At last check, CONN’s shares were trading 34.74% higher at $7.33, with volume up from daily average of 214,060 to 917,837.