Conn’s misses on Q2 profits; customer debt takes toll
The Woodlands, Texas – Conn’s Inc. missed Wall Street expectations for profits in the second quarter of fiscal 2015, as net income dropped 8% to $17.65 million from $19.16 million. In addition to charges related to facility closures, a significant increase in delinquent customer debt in the company’s credit segment negatively impacted net income results.
Meanwhile, total revenues soared 30% to $352.96 million from $270.69 million. Same-store sales rose 11.7%.
“Overall results were not satisfactory,” said Theodore M. Wright, chairman and CEO of Conn’s. “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 delinquency.”
In response to higher delinquency, Conn’s is further tightening its underwiriting and also reducing the level of no-interest programs and raising the interest rates in some markets to increase portfolio yield. As a result of increased bad customer debt, Conn’s reduced its fiscal 2015 earnings guidance while forecasting same-store sales growth of 5%-10%.
Ace Metrix: Target had top back-to-school ad
Mountain View, Calif. – Target’s back-to-school ad “Supplies They Need” resonated most with consumers among all back-to-school ads in 2014. According to TV and video advertising analytics provider Ace Metrix, consumers awarded an Ace Score of 673 to the Target spot.
Kohl’s is the most prolific back to school advertiser, airing 14 back to school ads, most of which focused on its seasonal styles and sales. The department store brand also had the highest average Ace Score (552), with Walmart, J.C. Penney and Staples falling next in line, of brands airing three or more pieces of back to school creative. Target’s “Supplies They Need” earned the highest Ace Score (673) and was the only Target spot to feature the charitable program which matches all supplies sales with a donation to the Kids in Need Foundation. The program contributed greatly to the strong score with 48% of respondents identifying the message or the featured offer to be the best thing about the ad, while another 8% said it was the visuals and 7% said the music.
While moms are generally thought of as the primary back to school shoppers, some brands showed dads being the back to school hero, a creative spin that was completely absent last year. Ads featuring dads in a leading role scored, on average, 6% higher with consumers. The highest rated dad-centered ad is Dell’s “A Genius,” which consumers gave an Ace Score of 624, the fourth highest score overall. Sonic, RadioShack, Yoplait and Toyota also used dads and humor to grab consumer attention.
The use of humor was dramatically higher than previous years, with 34% of back to school ads using humor this year, whereas only 16% of ads used humor in 2013. While scores for funny ads this year were higher than those of last year, funny ads on average performed less well than other back to school ads. The most effective, funny ads came from Sonic. Its 30-second and 15-second ads, “Letter Jacket,” earned 616 and 612, respectively, and were a new twist on its back to school ads from the prior year.
Guitar Center launches omnichannel music contest
Los Angeles – Guitar Center is launching the fourth installment of its omnichannel “Guitar Center’s Singer-Songwriter,” offering aspiring singer-songwriters across the country the chance to take their careers to the next level, on Sep. 1. The winner of Guitar Center’s Singer-Songwriter 4 will have the opportunity to record a four-song E.P with producer Don Was, perform to a national television audience on “Jimmy Kimmel Live,” new gear, $25,000 cash and more.
Beginning Sept. 1 through Nov. 2, unsigned singer-songwriters from across the continental United States are invited to submit an original live music performance video online. Submissions will be ranked on their social media engagement and fan growth throughout the submission period. The top-ranked 150 artists will be reviewed personally by Don Was who will then handpick five finalists to perform live at The Troubadour in Los Angeles, where one winner will be named.