Conn's Inc.(CONN), a leading speci alty retailer and provider of consumer credit, has released its unaudited financial results for the second quarter of 2023, ending on July 31. The company reported a net loss of $33.5 million for the quarter, a significant decline compared to a net income of $2.1 million during the same period in the previous year. The financial statement also revealed a decrease in total revenues, which amounted to $306.9 million, down from $346.6 million in Q2 2022.
The company's total net sales for the quarter amounted to $243.6 million, showing a decline from $279.5 million in the second quarter of 2022. Additionally, finance charges and other revenues reached $63.3 million, down from $67.1 million during the same period last year. These figures contributed to a total revenue of $306.9 million, reflecting a challenging market landscape that impacted Conn's Inc.'s financial performance.
Operating Performance and Expenses
The company's operating performance faced headwinds during the quarter, as reflected in its operating loss of $15.4 million. This marked a significant contrast to the operating income of $8.0 million recorded in Q2 2022. The cost of goods sold was reported at $154.0 million, down from $182.7 million in the same quarter of the previous year. Selling, general, and administrative expenses increased to $134.9 million, compared to $130.1 million in Q2 2022.
The retail segment's financial information for the quarter revealed a challenging scenario, with an operating loss of $10.4 million. Retail gross margin increased to 36.9%, up from 34.6% in Q2 2022. The credit segment also faced difficulties, reporting an operating loss of $4.5 million. The credit segment's operating margin decreased to -7.1%, from 11.9% in the same period last year.
Customer Accounts Receivable and Portfolio Statistics
As of July 31, 2023, Conn's Inc. reported a weighted average credit score of 615 for outstanding balances, slightly higher than the 611 recorded in the previous year. The carrying value of account balances re-aged more than six months decreased to $31.1 million, down from $35.8 million in 2022. The company's allowance for bad debts and uncollectible interest stood at 16.6% of the total customer accounts receivable portfolio balance.
Conn's Inc. faced a challenging quarter marked by a net loss of $33.5 million and declining revenues of $306.9 million. The company's retail and credit segments encountered difficulties, impacting its overall operating performance. As the company navigates these market challenges, it remains to be seen how Conn's Inc. will strategize and adapt to improve its financial position in the upcoming quarters.