Cover
Cover - shares | 3 Months Ended | |
Apr. 30, 2023 | May 29, 2023 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Apr. 30, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-34956 | |
Entity Registrant Name | CONN’S, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 06-1672840 | |
Entity Address, Address Line One | 2445 Technology Forest Blvd., | |
Entity Address, Address Line Two | Suite 800, | |
Entity Address, City or Town | The Woodlands, | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 77381 | |
City Area Code | 936 | |
Local Phone Number | 230-5899 | |
Title of 12(b) Security | Common Stock, par value $0.01 per share | |
Trading Symbol | CONN | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 24,233,595 | |
Entity Central Index Key | 0001223389 | |
Current Fiscal Year End Date | --01-31 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Apr. 30, 2023 | Jan. 31, 2023 |
Current assets: | ||
Cash and cash equivalents | $ 14,119 | $ 19,534 |
Restricted cash (includes VIE balances of $29,892 and $38,727, respectively) | 32,002 | 40,837 |
Customer accounts receivable, net of allowances (includes VIE balances of $218,594 and $251,689, respectively) | 417,359 | 421,683 |
Other accounts receivable | 55,866 | 56,887 |
Inventories | 236,789 | 240,783 |
Income taxes receivable | 38,934 | 38,436 |
Prepaid expenses and other current assets | 13,941 | 12,937 |
Total current assets | 809,010 | 831,097 |
Long-term portion of customer accounts receivable, net of allowances (includes VIE balances of $122,871 and $181,575, respectively) | 366,507 | 389,054 |
Property and equipment, net | 207,869 | 218,956 |
Operating lease assets | 279,905 | 262,104 |
Other assets | 12,817 | 15,004 |
Total assets | 1,676,108 | 1,716,215 |
Current liabilities: | ||
Current finance lease obligations | 869 | 937 |
Accounts payable | 69,766 | 71,685 |
Accrued compensation and related expenses | 16,044 | 13,285 |
Accrued expenses | 60,518 | 69,334 |
Operating lease liability - current | 58,851 | 53,208 |
Income taxes payable | 3,232 | 2,869 |
Deferred revenues and other credits | 10,294 | 11,043 |
Total current liabilities | 219,574 | 222,361 |
Operating lease liability - non current | 346,666 | 331,109 |
Long-term Debt and Lease Obligation | 615,377 | 636,079 |
Deferred Income Tax Liabilities, Net | 1,860 | 2,041 |
Other long-term liabilities | 23,124 | 22,215 |
Total liabilities | 1,206,601 | 1,213,805 |
Commitments and contingencies (Note 6) | ||
Stockholders’ equity: | ||
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Preferred Stock, Value, Issued | $ 0 | $ 0 |
Common Stock, Value, Issued | 336 | 334 |
Treasury Stock, Value | (193,370) | (193,370) |
Additional paid-in capital | 157,712 | 155,523 |
Retained earnings | 504,829 | 539,923 |
Total stockholders’ equity | 469,507 | 502,410 |
Total liabilities and stockholders’ equity | 1,676,108 | $ 1,716,215 |
Long-term Debt | $ 328,334 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Apr. 30, 2023 | Jan. 31, 2023 |
Restricted cash | $ 32,002 | $ 40,837 |
Customer accounts receivable, net of allowances (includes VIE balances of $218,594 and $251,689, respectively) | 417,359 | 421,683 |
Long-term portion of customer accounts receivable, net of allowances (includes VIE balances of $122,871 and $181,575, respectively) | 366,507 | $ 389,054 |
Long-term Debt | $ 328,334 | |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 33,576,425 | 33,378,998 |
Treasury Stock, Common, Shares | 9,404,920 | |
Variable Interest Entity | ||
Restricted cash | $ 29,892 | $ 38,727 |
Customer accounts receivable, net of allowances (includes VIE balances of $218,594 and $251,689, respectively) | 218,594 | 251,689 |
Long-term portion of customer accounts receivable, net of allowances (includes VIE balances of $122,871 and $181,575, respectively) | 122,871 | 181,575 |
Long-term Debt | $ 311,917 | $ 410,790 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 30, 2023 | Apr. 30, 2022 | |
Revenues: | ||
Total net sales | $ 222,547 | $ 272,264 |
Finance charges and other revenues | 62,023 | 67,557 |
Total revenues | 284,570 | 339,821 |
Costs and expenses: | ||
Cost of goods sold | 147,933 | 178,382 |
Selling, general and administrative expense | 129,238 | 132,783 |
Provision for bad debts | 28,909 | 14,731 |
Charges and credits, net | (807) | 0 |
Total costs and expenses | 305,273 | 325,896 |
Operating (loss) income | (20,703) | 13,925 |
Interest expense | 16,379 | 5,521 |
(Loss) income before income taxes | (37,082) | 8,404 |
(Benefit) provision for income taxes | (1,702) | 2,183 |
Net (loss) income | $ (35,380) | $ 6,221 |
(Loss) income per share: | ||
Basic (in dollars per share) | $ (1.47) | $ 0.25 |
Diluted (in dollars per share) | $ (1.47) | $ 0.25 |
Weighted average common shares outstanding: | ||
Basic (in shares) | 24,134,381 | 24,801,987 |
Diluted (in shares) | 24,134,381 | 25,313,613 |
Product | ||
Revenues: | ||
Total net sales | $ 203,484 | $ 249,973 |
RSA Commission | ||
Revenues: | ||
Total net sales | 16,905 | 19,836 |
Service | ||
Revenues: | ||
Total net sales | $ 2,158 | $ 2,455 |
CONSOLIDATED STATEMENT OF SHARE
CONSOLIDATED STATEMENT OF SHAREHOLDERS EQUITY Statement - USD ($) $ in Thousands | Total | (PSUs) | Maximum (PSUs) | Minimum (PSUs) | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Treasury Stock, Common |
Treasury Stock, Common, Shares | 6,088,920 | |||||||
Balance (in shares) at Jan. 31, 2022 | 33,015,053 | |||||||
Balance at Jan. 31, 2022 | $ 614,819 | $ 330 | $ 140,419 | $ 599,215 | $ (125,145) | |||
Stock Repurchased During Period, Value | (68,225) | $ (68,225) | ||||||
Stock Repurchased During Period, Shares | (3,316,000) | |||||||
Net (loss) income | $ 6,221 | |||||||
Balance at Apr. 30, 2022 | $ (193,370) | |||||||
Expected volatility rate | 78% | 80% | ||||||
Dividend yield | 0% | |||||||
Treasury Stock, Common, Shares | (9,404,920) | |||||||
Treasury Stock, Common, Shares | 9,404,920 | |||||||
Balance (in shares) at Jan. 31, 2023 | 33,378,998 | |||||||
Balance at Jan. 31, 2023 | $ 502,410 | $ 334 | 155,523 | 539,923 | $ (193,370) | |||
Balance (Accounting Standards Update 2022-02 Cumulative Effect, Period of Adoption) at Jan. 31, 2023 | 286 | |||||||
Exercise of options and vesting of restricted stock, net of tax (in shares) | 166,571 | |||||||
Exercise of options and vesting of restricted stock, net of withholding tax | (927) | $ 2 | (929) | |||||
Issuance of common stock under Employee Stock Purchase Plan (in shares) | 30,856 | |||||||
Issuance of common stock under Employee Stock Purchase Plan | 154 | 154 | ||||||
Stock-based compensation | $ 2,964 | 2,964 | ||||||
Stock Repurchased During Period, Shares | (3,316,000) | |||||||
Net (loss) income | $ (35,380) | (35,380) | ||||||
Balance (in shares) at Apr. 30, 2023 | 33,576,425 | |||||||
Balance at Apr. 30, 2023 | $ 469,507 | $ 336 | $ 157,712 | $ 504,829 | $ (193,370) | |||
Expected volatility rate | 73% | |||||||
Dividend yield | 0% | |||||||
Treasury Stock, Common, Shares | 9,404,920 | (9,404,920) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 30, 2023 | Apr. 30, 2022 | |
Cash flows from operating activities: | ||
Net Income (Loss) Attributable to Parent | $ (35,380) | $ 6,221 |
Adjustments to Reconcile Net Income (Loss) to Cash Provided by (Used in) Operating Activities [Abstract] | ||
Depreciation | 12,100 | 11,429 |
Change in right-of-use asset | 16,281 | 9,601 |
Amortization of debt issuance costs | 3,365 | 1,440 |
Provision for bad debts and uncollectible interest | 36,505 | 24,072 |
Stock-based compensation expense | 2,964 | 3,409 |
Charges and credits, net | (807) | 0 |
Deferred income taxes | (265) | (235) |
Gain (Loss) on Extinguishment of Debt | 0 | 0 |
Loss on disposal of property and equipment | 2,020 | 310 |
Tenant improvement allowances received from landlords | 6,068 | 5,062 |
Change in operating assets and liabilities: | ||
Customer accounts receivable | (9,155) | 22,706 |
Other accounts receivables | 913 | 3,874 |
Inventories | 3,994 | (8,822) |
Other assets | 457 | (1,342) |
Accounts payable | (1,919) | (3,046) |
Accrued expenses | 2,007 | (16,501) |
Operating leases | (17,200) | (14,153) |
Income taxes | (1,233) | 2,424 |
Increase (Decrease) in Contract with Customer, Liability | 1,259 | 667 |
Net cash provided by operating activities | 26,148 | 47,116 |
Cash flows from investing activities: | ||
Purchases of property and equipment | (16,211) | (18,957) |
Net cash used in investing activities | (16,211) | (18,957) |
Cash flows from financing activities: | ||
Proceeds from issuance of asset-backed notes | 0 | 0 |
Payments on asset-backed notes | (103,267) | (102,639) |
Borrowings under revolving credit facility | 253,898 | 376,386 |
Payments on revolving credit facility | (171,898) | (224,386) |
Payments of debt issuance costs and amendment fees | (1,962) | (22) |
Proceeds from stock issued under employee benefit plans | 155 | 194 |
Tax payments associated with equity-based compensation transactions | (928) | (2,029) |
Payments for Repurchase of Common Stock | 0 | (71,696) |
Other | (185) | (222) |
Net cash used in financing activities | (24,187) | (24,414) |
Net change in cash, cash equivalents and restricted cash | (14,250) | 3,745 |
Cash, cash equivalents and restricted cash, beginning of period | 60,371 | 39,637 |
Cash, cash equivalents and restricted cash, end of period | 46,121 | 43,382 |
Non-cash investing and financing activities: | ||
Right-of-use assets obtained in exchange for new finance lease liabilities | 0 | 1 |
Right-of-use assets obtained in exchange for new operating lease liabilities | 58,608 | 11,055 |
Property and equipment purchases not yet paid | 9,197 | 17,696 |
Accrual of unsettled payments for repurchase of common stock | 0 | 3,471 |
Supplemental cash flow data: | ||
Cash interest paid | 10,231 | 3,613 |
Cash income taxes paid, net | (204) | 0 |
Impairment of Long-Lived Assets to be Disposed of | $ 4,174 | $ 0 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Apr. 30, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Business. Conn’s, Inc., a Delaware corporation, is a holding company with no independent assets or operations other than its investments in its subsidiaries. References to “we,” “our,” “us,” “the Company,” “Conn’s” or “CONN” refer to Conn’s, Inc. and, as apparent from the context, its subsidiaries. Conn’s is a leading specialty retailer that offers a broad selection of quality, branded durable consumer goods and related services in addition to proprietary credit solutions for its core credit-constrained consumers. We operate an integrated and scalable business through our retail stores and website. Our complementary product offerings include furniture and mattresses, home appliances, consumer electronics and home office products from leading global brands across a wide range of price points. Our credit offering provides financing solutions to a large, under-served population of credit-constrained consumers who typically have limited credit alternatives. We operate two reportable segments: retail and credit. Our retail stores bear the “Conn’s HomePlus” name with all of our stores providing the same products and services to a common customer group. Our stores follow the same procedures and methods in managing their operations. Our retail business and credit business are operated independently from each other. The credit segment is dedicated to providing short- and medium-term financing to our retail customers. The retail segment is not involved in credit approval decisions or collection efforts. Our management evaluates performance and allocates resources based on the operating results of the retail and credit segments. Basis of Presentation. The accompanying unaudited Condensed Consolidated Financial Statements of Conn’s, Inc. and its wholly-owned subsidiaries, including its Variable Interest Entities (“VIEs”), have been prepared by management in accordance with U.S. generally accepted accounting principles (“GAAP”) and prevailing industry practice for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, we do not include all of the information and footnotes required by GAAP for complete financial statements. The accompanying financial statements reflect all adjustments that are, in the opinion of management, necessary for a fair presentation of the results for the interim periods presented. All such adjustments are of a normal recurring nature. The condensed consolidated financial position, results of operations and cash flows for these interim periods are not necessarily indicative of the results that may be expected in future periods. The balance sheet at January 31, 2023 has been derived from the audited financial statements at that date. The financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the fiscal year ended January 31, 2023 (the “2023 Form 10-K”) filed with the United States Securities and Exchange Commission (the “SEC”) on March 29, 2023. Fiscal Year. Our fiscal year ends on January 31. References to a fiscal year refer to the calendar year in which the fiscal year ends. Principles of Consolidation. The Condensed Consolidated Financial Statements include the accounts of Conn’s, Inc. and its wholly-owned subsidiaries. All material intercompany transactions and balances have been eliminated in consolidation. Variable Interest Entities. VIEs are consolidated if the Company is the primary beneficiary. The primary beneficiary of a VIE is the party that has (i) the power to direct the activities that most significantly impact the performance of the VIE and (ii) the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. We securitize customer accounts receivables by transferring the receivables to various bankruptcy-remote VIEs. We retain the servicing of the securitized portfolio and have a variable interest in each corresponding VIE by holding the residual equity. We have determined that we are the primary beneficiary of each respective VIE because (i) our servicing responsibilities for the securitized portfolio give us the power to direct the activities that most significantly impact the performance of the VIE and (ii) our variable interest in the VIE gives us the obligation to absorb losses and the right to receive residual returns that potentially could be significant. As a result, we consolidate the respective VIEs within our Condensed Consolidated Financial Statements. Refer to Note 5, Debt and Financing Lease Obligations , and Note 7, Variable Interest Entities , for additional information. Use of Estimates. The preparation of financial statements in accordance with GAAP requires management to make informed judgments and estimates that affect the reported amounts of assets, liabilities, revenues and expenses, and the disclosure of contingent assets and liabilities. Changes in facts and circumstances or additional information may result in revised estimates, and actual results may differ, even significantly, from these estimates. Management evaluates its estimates and related assumptions regularly, including those related to the allowance for doubtful accounts and allowances for no-interest option credit programs, which are particularly sensitive given the size of our customer portfolio balance. Cash and Cash Equivalents. As of April 30, 2023 and January 31, 2023, cash and cash equivalents included cash and credit card deposits in transit. Credit card deposits in transit included in cash and cash equivalents were $6.8 million and $5.2 million as of April 30, 2023 and January 31, 2023, respectively. Restricted Cash. The restricted cash balance as of April 30, 2023 and January 31, 2023 includes $24.7 million and $33.6 million, respectively, of cash we collected as servicer on the securitized receivables that was subsequently remitted to the VIEs and $5.2 million and $4.2 million, respectively, of cash held by the VIEs as additional collateral for the asset-backed notes. Customer Accounts Receivable. Customer accounts receivable reported in the Condensed Consolidated Balance Sheet includes total receivables managed, including both those transferred to the VIEs and those not transferred to the VIEs. Customer accounts receivable are recognized at the time the customer takes possession of the product. Expected lifetime losses on customer accounts receivable are recognized upon origination through an allowance for credit losses account that is deducted from the customer account receivable balance and presented net. Customer accounts receivable include the net of unamortized deferred fees charged to customers and origination costs. Customer receivables are considered delinquent if a payment has not been received on the scheduled due date. Accounts that are delinquent more than 209 days as of the end of a month are charged-off against the allowance for doubtful accounts along with interest accrued subsequent to the last payment. Interest Income on Customer Accounts Receivable. Interest income, which includes interest income and amortization of deferred fees and origination costs, is recorded using the interest method and is reflected in finance charges and other revenues. Typically, interest income is recorded until the customer account is paid off or charged-off and we provide an allowance for estimated uncollectible interest. We reserve for interest that is more than 60 days past due. Any contractual interest income received from customers in excess of the interest income calculated using the interest method is recorded as deferred revenue on our balance sheets. At April 30, 2023 and January 31, 2023, there was $8.0 million and $8.1 million, respectively, of deferred interest included in deferred revenues and other credits and other long-term liabilities. The deferred interest will ultimately be brought into income as the accounts pay off or charge-off. We offer a 12-month no-interest option program. If the customer is delinquent in making a scheduled monthly payment or does not repay the principal in full by the end of the no-interest option program period (grace periods are provided), the account does not qualify for the no-interest provision and none of the interest earned is waived. Interest income is recognized based on estimated accrued interest earned to date on all no-interest option finance programs with an offsetting reserve for those customers expected to satisfy the requirements of the program based on our historical experience. We place accounts in non-accrual status when legally required. Payments received on non-accrual loans are applied to principal and reduce the balance of the loan. At April 30, 2023 and January 31, 2023, the carrying value of customer accounts receivable in non-accrual status was $8.1 million and $7.9 million, respectively. At April 30, 2023 and January 31, 2023, the carrying value of customer accounts receivable that were past due 90 days or more and still accruing interest totaled $83.5 million and $92.2 million, respectively. At April 30, 2023 and January 31, 2023, the carrying value of customer accounts receivable in a bankruptcy status that were less than 60 days past due of $7.2 million and $7.1 million, respectively, were included within the customer receivables balance carried in non-accrual status. Allowance for Doubtful Accounts. The determination of the amount of the allowance for credit losses is, by nature, highly complex and subjective. Future events that are inherently uncertain could result in material changes to the level of the allowance for credit losses. General economic conditions, changes to state or federal regulations and a variety of other factors that affect the ability of borrowers to service their debts or our ability to collect will impact the future performance of the portfolio. We establish an allowance for credit losses, including estimated uncollectible interest, to cover expected credit losses on our customer accounts receivable resulting from the failure of customers to make contractual payments. Our customer accounts receivable portfolio balance consists of a large number of relatively small, homogeneous accounts. None of our accounts are large enough to warrant individual evaluation for impairment. The allowance for credit losses is measured on a collective (pool) basis where similar risk characteristics exist. The allowance for credit losses is determined for each pool and added to the pool’s carrying amount to establish a new amortized cost basis. We use a risk-based, pool-level segmentation framework to calculate the expected loss rate. This framework is based on our historical gross charge-off history. In addition to adjusted historical gross charge-off rates, estimates of post-charge-off recoveries, including cash payments from customers, sales tax recoveries from taxing jurisdictions, and payments received under credit insurance and repair service agreement (“RSA”) policies are also considered. We also consider forward-looking economic forecasts based on a statistical analysis of economic factors (specifically, forecast of unemployment rates over the reasonable and supportable forecasting period). To the extent that situations and trends arise which are not captured in our model, management will layer on additional qualitative adjustments. Pursuant to ASC 326 requirements, the Company uses a 24-month reasonable and supportable forecast period for the customer accounts receivable portfolio. We estimate losses beyond the 24-month forecast period based on historic loss rates experienced over the life of our historic loan portfolio by loan pool type. We revisit our measurement methodology and assumption annually, or more frequently if circumstances warrant. As of April 30, 2023 and January 31, 2023, the balance of allowance for doubtful accounts and uncollectible interest for non-restructured customer receivables was $138.3 million and $150.6 million, respectively. As of April 30, 2023 and January 31, 2023, the amount included in the allowance for doubtful accounts associated with principal and interest on restructured accounts was $32.6 million and $33.6 million, respectively. Debt Issuance Costs. Costs that are direct and incremental to debt issuance are deferred and amortized to interest expense using the effective interest method over the expected life of the debt. All other costs related to debt issuance are expensed as incurred. We present debt issuance costs associated with long-term debt as a reduction of the carrying amount of the debt. Unamortized costs related to the Revolving Credit Facility, as defined in Note 5, Debt and Financing Lease Obligations , are included in other assets on our Condensed Consolidated Balance Sheet and were $4.8 million and $5.4 million as of April 30, 2023 and January 31, 2023, respectively. Income Taxes. For the three months ended April 30, 2023 and 2022, we utilized the estimated annual effective tax rate based on our estimated fiscal year 2024 and 2023 pre-tax income, respectively, in determining income tax expense. Provision for income taxes for interim periods is based on an estimated annual income tax rate, adjusted for discrete tax items. As a result, our interim effective tax rates may vary significantly from the statutory tax rate and the annual effective tax rate. For the three months ended April 30, 2023 and 2022, the effective tax rate was 4.6% and 26.0%, respectively. The primary factor affecting the decrease in our effective tax rate for the three months ended April 30, 2023 was the impact of a valuation allowance on deferred tax assets, state taxes and compensation expense. Stock-based Compensation. During the three months ended April 30, 2023, the Company granted performance stock awards (“PSUs”) and restricted stock awards (“RSUs”). The awards had a combined aggregate grant date fair value of approximately $9.2 million. The PSUs will vest in fiscal year 2027, if at all, upon certification by the Compensation Committee of the Board of Directors of satisfaction of certain total stockholder return performance conditions over the three fiscal years commencing with fiscal year 2024. The RSUs will vest ratably, over periods of three years from the date of grant. Stock-based compensation expense is recorded, net of actual forfeitures, for share-based compensation awards over the requisite service period using the straight-line method. For equity-classified share-based compensation awards, expense is recognized based on the grant-date fair value. For stock option grants, we use the Black-Scholes model to determine fair value. For grants of restricted stock units, the fair value of the grant is the market value of our stock at the date of issuance. For grants of performance-based restricted stock units, the fair value is the market value of our stock at the date of issuance adjusted for the market condition using a Monte Carlo model. The following table sets forth the RSUs and PSUs granted during the three months ended April 30, 2023 and 2022: Three Months Ended 2023 2022 RSUs (1) 746,412 394,380 PSUs (2) 174,290 176,509 Total stock awards granted 920,702 570,889 Aggregate grant date fair value (in thousands) $ 9,157 $ 14,691 (1) The RSUs issued during the three months ended April 30, 2023 and 2022 are scheduled to vest ratably over periods of three years to four years from the date of grant with the exception of RSU grants issued to the Board of Directors. (2) The weighted-average assumptions used in the Monte Carlo model for the PSUs granted during the three months ended April 30, 2023 included expected volatility of 73.0%, an expected term of 3 years and risk-free interest rate of 3.75%. No dividend yield was included in the weighted-average assumptions for the PSUs granted during the three months ended April 30, 2023. The weighted-average assumptions used in the Monte Carlo model for the PSUs granted during the three months ended April 30, 2022 included expected volatility of 78.0%-80.0% an expected term of 3 years and risk-free interest rate of 1.39%- 2.58% No dividend yield was included in the weighted average assumptions for the PSUs granted during the three months ended April 30, 2022. For the three months ended April 30, 2023 and 2022, stock-based compensation expense was $3.0 million and $3.4 million, respectively. Earnings per Share. Basic earnings per share for a particular period is calculated by dividing net income by the weighted-average number of common shares outstanding during the period. Diluted earnings per share includes the dilutive effects of any stock options, RSUs and PSUs, which are calculated using the treasury-stock method. The following table sets forth the shares outstanding for the earnings per share calculations: Three Months Ended 2023 2022 Weighted-average common shares outstanding - Basic 24,134,381 24,801,987 Dilutive effect of stock options, PSUs and RSUs — 511,626 Weighted-average common shares outstanding - Diluted 24,134,381 25,313,613 For the three months ended April 30, 2023 and 2022, the weighted average number of stock options, RSUs and PSUs not included in the calculation due to their anti-dilutive effect, was 2,163,896 and 901,546, respectively. Fair Value of Financial Instruments. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Assets and liabilities recorded at fair value are categorized using defined hierarchical levels related to subjectivity associated with the inputs to fair value measurements as follows: • Level 1 – Inputs represent unadjusted quoted prices in active markets for identical assets or liabilities. • Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly (for example, quoted market prices for similar assets or liabilities in active markets or quoted market prices for identical assets or liabilities in markets not considered to be active, inputs other than quoted prices that are observable for the asset or liability, or market-corroborated inputs). • Level 3 – Inputs that are not observable from objective sources such as our internally developed assumptions used in pricing an asset or liability (for example, an estimate of future cash flows used in our internally developed present value of future cash flows model that underlies the fair-value measurement). In determining fair value, we use observable market data when available, or models that incorporate observable market data. When we are required to measure fair value and there is not a market-observable price for the asset or liability or for a similar asset or liability, we use the cost or income approach depending on the quality of information available to support management’s assumptions. The cost approach is based on management’s best estimate of the current asset replacement cost. The income approach is based on management’s best assumptions regarding expectations of future net cash flows and discounts the expected cash flows using a commensurate risk-adjusted discount rate. Such evaluations involve significant judgment, and the results are based on expected future events or conditions such as sales prices, economic and regulatory climates, and other factors, most of which are often outside of management’s control. However, we believe assumptions used reflect a market participant’s view of long-term prices, costs, and other factors and are consistent with assumptions used in our business plans and investment decisions. In arriving at fair-value estimates, we use relevant observable inputs available for the valuation technique employed. If a fair-value measurement reflects inputs at multiple levels within the hierarchy, the fair-value measurement is characterized based on the lowest level of input that is significant to the fair-value measurement. The fair value of cash and cash equivalents, restricted cash and accounts payable approximate their carrying amounts because of the short maturity of these instruments. The fair value of customer accounts receivable, determined using a Level 3 discounted cash flow analysis, approximates their carrying value, net of the allowance for doubtful accounts. The fair value of our Revolving Credit Facility approximates carrying value based on the current borrowing rate for similar types of borrowing arrangements. At April 30, 2023, the fair value of the asset backed notes was $307.8 million as compared to the carrying value of $328.3 million and was determined using Level 2 inputs based on inactive trading activity. Deferred Revenue. Deferred revenue related to contracts with customers consists of deferred customer deposits and deferred RSA administration fees. During the three months ended April 30, 2023, we recognized $3.2 million of revenue for customer deposits deferred as of January 31, 2023. During the three months ended April 30, 2023, we recognized $0.8 million of revenue for RSA administrative fees deferred as of January 31, 2023. Recent Accounting Pronouncements Adopted. Financial Instruments - Troubled Debt Restructurings and Vintage Disclosures. In March 2022, the FASB issued Accounting Standards Update ("ASU") 2022-02 ("ASU 2022-02"), Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures, an update that eliminates the accounting guidance for troubled debt |
Customer Accounts Receivable
Customer Accounts Receivable | 3 Months Ended |
Apr. 30, 2023 | |
Receivables [Abstract] | |
Customer Accounts Receivable | Customer Accounts Receivable Customer accounts receivable consisted of the following: (in thousands) April 30, January 31, Customer accounts receivable (1) (2) $ 983,324 $ 1,025,364 Deferred fees and origination costs, net (11,211) (11,699) Allowance for no-interest option credit programs (17,449) (18,753) Allowance for uncollectible interest and fees (17,382) (20,007) Carrying value of customer accounts receivable 937,282 974,905 Allowance for credit losses (3) (153,416) (164,168) Carrying value of customer accounts receivable, net of allowance for credit losses 783,866 810,737 Short-term portion of customer accounts receivable, net (417,359) (421,683) Long-term customer accounts receivable, net $ 366,507 $ 389,054 (1) As of April 30, 2023 and January 31, 2023, the customer accounts receivable balance included $24.6 million and $27.5 million, respectively, in interest receivable. Interest receivable outstanding, net of the allowance for uncollectible interest, as of April 30, 2023 and January 31, 2023 was $7.2 million and $7.5 million, respectively. (2) As of April 30, 2023 and January 31, 2023, the carrying value of customer accounts receivable past due one day or greater was $275.9 million and $290.4 million, respectively. These amounts include the 60+ days past due balances shown above. Further, the carrying value of customer accounts receivable which received a re-age at least once during the lifetime of the loan was $155.1 million and $160.9 million as of April 30, 2023 and January 31, 2023, respectively. (3) Our current methodology to estimate expected credit losses utilized macroeconomic forecasts as of April 30, 2023 and January 31, 2023. Our forecast utilized economic projections from a major rating service. The allowance for credit losses included in the current and long-term portion of customer accounts receivable, net as shown in the Condensed Consolidated Balance Sheet were as follows: (in thousands) April 30, 2023 January 31, 2023 Customer accounts receivable - current $ 507,064 $ 517,611 Allowance for credit losses for customer accounts receivable - current (89,705) (95,928) Customer accounts receivable, net of allowances 417,359 421,683 Customer accounts receivable - non current 447,740 477,301 Allowance for credit losses for customer accounts receivable - non current (81,233) (88,247) Long-term portion of customer accounts receivable, net of allowances 366,507 389,054 Total customer accounts receivable, net $ 783,866 $ 810,737 The following presents the activity in our allowance for credit losses and uncollectible interest for customer receivables: Three Months Ended April 30, 2023 Three Months Ended April 30, 2022 (in thousands) Customer Customer Allowance at beginning of period $ 150,579 $ 33,595 $ 184,174 $ 165,044 $ 43,976 $ 209,020 ASU 2022-02 Adjustment — (372) (372) — — — Adjusted allowance at beginning of period 150,579 33,223 183,802 165,044 43,976 209,020 Provision for credit loss expense (1) 27,522 8,875 36,397 18,298 5,412 23,710 Principal charge-offs (2) (39,522) (9,404) (48,926) (31,622) (12,470) (44,092) Interest charge-offs (8,393) (1,950) (10,343) (7,656) (3,017) (10,673) Recoveries (2) 8,064 1,874 9,938 8,341 3,289 11,630 Allowance at end of period $ 138,250 $ 32,618 $ 170,868 $ 152,405 $ 37,190 $ 189,595 Average total customer portfolio balance $ 918,678 $ 82,568 $ 1,001,246 $ 997,104 $ 97,641 $ 1,094,745 (1) Includes provision for uncollectible interest, which is included in finance charges and other revenues, and changes in expected future recoveries. (2) Charge-offs include the principal amount of losses (excluding accrued and unpaid interest). Recoveries include the principal amount collected during the period for previously charged-off balances. Net charge-offs are calculated as the net of principal charge-offs and recoveries. We manage our customer accounts receivable portfolio using delinquency as a key credit quality indicator. The following table presents the delinquency distribution of the carrying value of customer accounts receivable by calendar year of origination. The information is presented as of April 30, 2023: (in thousands) Delinquency Bucket 2023 2022 2021 2020 Prior Total % of Total Current $ 176,556 $ 324,579 $ 134,066 $ 22,487 $ 3,680 $ 661,368 70.6 % 1-30 15,800 63,347 39,623 9,341 2,575 130,686 13.9 % 31-60 3,722 17,060 11,950 3,066 1,151 36,949 3.9 % 61-90 1,568 11,743 7,800 2,166 845 24,122 2.6 % 91+ — 41,677 31,347 7,703 3,430 84,157 9.0 % Total $ 197,646 $ 458,406 $ 224,786 $ 44,763 $ 11,681 $ 937,282 100.0 % Gross Charge-offs for the three months ended April 30, 2023 $ — $ 25,489 $ 31,194 $ 9,087 $ 4,760 $ 70,530 |
Charges and Credits
Charges and Credits | 3 Months Ended |
Apr. 30, 2023 | |
Charges and Credits [Abstract] | |
Charges and Credits | 3. Charges and Credits, net Charges and credits consisted of the following: Three Months Ended (in thousands) 2023 2022 Store closure $ 2,340 $ — Asset sale (3,147) — Total charges and credits $ (807) $ — During the three months ended April 30, 2023, we recognized a $3.1 million gain related to the sale of a single store location net of asset disposal costs. Furthermore, we recognized $2.3 million in store closure costs related to the impairment of assets associated with the decision to end the store-within-a-store test with Belk, Inc. |
Finance Charges and Other Reven
Finance Charges and Other Revenue | 3 Months Ended |
Apr. 30, 2023 | |
Supplemental Disclosure of Finance Charges and Other Revenue [Abstract] | |
Finance Charges and Other Revenues | Finance Charges and Other Revenues Finance charges and other revenues consisted of the following: Three Months Ended (in thousands) 2023 2022 Interest income and fees $ 57,189 $ 62,714 Insurance income 4,440 4,572 Other revenues 394 271 Total finance charges and other revenues $ 62,023 $ 67,557 Interest income and fees and insurance income are derived from the credit segment operations, whereas other revenues are derived from the retail segment operations. Insurance income is comprised of sales commissions from third-party insurance companies that are recognized when coverage is sold and retrospective income paid by the insurance carrier if insurance claims are less than earned premiums. |
Debt and Financing Lease Obliga
Debt and Financing Lease Obligations | 3 Months Ended |
Apr. 30, 2023 | |
Debt Disclosure [Abstract] | |
Debt and Financing Lease Obligations | Debt and Financing Lease Obligations Debt and financing lease obligations consisted of the following: (in thousands) April 30, January 31, Revolving credit facility $ 206,000 $ 221,000 Term Loan 100,000 — 2021-A VIE Asset-backed Class B Notes 26,426 54,597 2021-A VIE Asset-backed Class C Notes 57,994 63,890 2022-A VIE Asset-backed Class A Notes 48,734 117,935 2022-A VIE Asset-backed Class B Notes 132,090 132,090 2022-A VIE Asset-backed Class C Notes 63,090 63,090 Financing lease obligations 4,945 5,226 Total debt and financing lease obligations 639,279 657,828 Less: Deferred debt issuance costs (23,033) (20,812) Current maturities of long-term debt and financing lease obligations (869) (937) Long-term debt and financing lease obligations $ 615,377 $ 636,079 Asset-backed notes. From time to time, we securitize customer accounts receivables by transferring the receivables to various bankruptcy-remote VIEs. In turn, the VIEs issue asset-backed notes secured by the transferred customer accounts receivables and restricted cash held by the VIEs. Under the terms of the securitization transactions, all cash collections and other cash proceeds of the customer receivables go first to the servicer and the holders of issued notes, and then to us as the holder of non-issued notes, if any, and residual equity. We retain the servicing of the securitized portfolios and receive a monthly fee of 4.75% (annualized) based on the outstanding balance of the securitized receivables. In addition, we, rather than the VIEs, retain all credit insurance income together with certain recoveries related to credit insurance and RSAs on charge-offs of the securitized receivables, which are reflected as a reduction to net charge-offs on a consolidated basis. The asset-backed notes were offered and sold to qualified institutional buyers pursuant to the exemptions from registration provided by Rule 144A under the Securities Act of 1933. If an event of default were to occur under the indenture that governs the respective asset-backed notes, the payment of the outstanding amounts may be accelerated, in which event the cash proceeds of the receivables that otherwise might be released to the residual equity holder would instead be directed entirely toward repayment of the asset-backed notes, or if the receivables are liquidated, all liquidation proceeds could be directed solely to repayment of the asset-backed notes as governed by the respective terms of the asset-backed notes. The holders of the asset-backed notes have no recourse to assets outside of the VIEs. Events of default include, but are not limited to, failure to make required payments on the asset-backed notes or specified bankruptcy-related events. The asset-backed notes outstanding as of April 30, 2023 consisted of the following: (dollars in thousands) Asset-Backed Notes Original Principal Amount Original Net Proceeds (1) Current Principal Amount Issuance Date Maturity Date Contractual Interest Rate Effective Interest Rate (2) 2021-A Class B Notes 66,090 65,635 26,426 11/23/2021 5/15/2026 2.87% 3.74% 2021-A Class C Notes 63,890 63,450 57,994 11/23/2021 5/15/2026 4.59% 5.16% 2022-A Class A Notes 275,600 273,731 48,734 7/21/2022 12/15/2026 5.87% 9.77% 2022-A Class B Notes 132,090 129,050 132,090 7/21/2022 12/15/2026 9.52% 10.51% 2022-A Class C Notes 63,090 43,737 63,090 11/30/2022 12/15/2026 0.00% 19.74% Total $ 600,760 $ 575,603 $ 328,334 (1) After giving effect to debt issuance costs. (2) For the three months ended April 30, 2023, and inclusive of the impact of changes in timing of actual and expected cash flows. Revolving Credit Facility. On March 29, 2021, Conn’s, Inc. and certain of its subsidiaries (the “Borrowers”) entered into the Fifth Amended and Restated Loan and Security Agreement (the “Fifth Amended and Restated Loan Agreement”), with certain lenders, which provides for a $650.0 million asset-based revolving credit facility (as amended, the “Revolving Credit Facility”) under which credit availability is subject to a borrowing base and a maturity date of March 29, 2025. The Fifth Amended and Restated Loan Agreement, among other things, permits borrowings under the Letter of Credit Subline (as defined in the Fifth Amended and Restated Loan Agreement) that exceed the cap of $40 million to $100 million, solely at the discretion of the lenders for such amounts in excess of $40 million. The obligations under the Revolving Credit Facility are secured by substantially all assets of the Company, excluding the assets of the VIEs. As of April 30, 2023, under our Revolving Credit Facility, we had immediately available borrowing capacity of $214.0 million, net of standby letters of credit issued of $22.2 million, and an additional $207.7 million that may become available if the balance of eligible customer receivables and total eligible inventory balances increases. On November 21, 2022, we entered into Amendment No. 1 (the "Amendment") to the Fifth Amended and Restated Loan Agreement. Under the Amendment, loans under the Revolving Credit Facility bear interest, at our option, at a rate of SOFR plus a margin ranging from 2.50% to 3.25% per annum (depending on a pricing grid determined by our total leverage ratio) or the alternate base rate plus a margin ranging from 1.50% to 2.25% per annum (depending on a pricing grid determined by our total leverage ratio). The alternate base rate is a rate per annum equal to the greatest of the prime rate, the federal funds effective rate plus 0.5%, or SOFR for a 30-day interest period plus 1.0%. We also pay an unused fee on the portion of the commitments that is available for future borrowings or letters of credit at a rate ranging from 0.25% to 0.50% per annum, depending on the average outstanding balance and letters of credit of the Revolving Credit Facility in the immediately preceding quarter. The weighted-average interest rate on borrowings outstanding and including unused line fees under the Revolving Credit Facility was 8.3% for the three months ended April 30, 2023. The Revolving Credit Facility places restrictions on our ability to incur additional indebtedness, grant liens on assets, make distributions on equity interests, dispose of assets, make loans, pay other indebtedness, engage in mergers, and other matters. The Revolving Credit Facility restricts our ability to make dividends and distributions unless no event of default exists and a liquidity test is satisfied. Subsidiaries of the Company may pay dividends and make distributions to the Company and other obligors under the Revolving Credit Facility without restriction. We are restricted from making distributions as a result of the Revolving Credit Facility distribution and payment restrictions. The Revolving Credit Facility contains customary default provisions, which, if triggered, could result in acceleration of all amounts outstanding under the Revolving Credit Facility. Term Loan and Security Agreement . On February 21, 2023, Conn’s, Inc. (the “Company”), as parent and guarantor, Conn Appliances, Inc., Conn Credit I, LP and Conn Credit Corporation, Inc., as borrowers (the “Borrowers”), entered into a second-lien term loan and security agreement (the “Term Loan”) with Pathlight Capital LP, as administrative agent and collateral agent, and the financial institutions party thereto, as lenders (the “Lenders”). The Term Loan provides for an aggregate commitment of $100.0 million to the Borrowers pursuant to a three-year secured term loan credit facility, which was fully drawn on February 21, 2023. Outstanding loans under the Term Loan will bear interest at an aggregate rate per annum equal to the Term SOFR Rate (as defined in the Term Loan), subject to a 4.80% floor, plus a margin of 7.50%. The obligations of the Borrowers under the Term Loan are guaranteed by the Company and certain of the Borrowers’ subsidiaries. The Borrowers are required to make quarterly scheduled amortization payments of the Term Loan prior to the maturity thereof in an amount equal to $1.25 million. The Term Loan is secured by liens (subject, in the case of priority, to the liens under the Fifth Amendment and Restated Loan Agreement) on substantially all of the assets of the Borrowers and their subsidiaries, subject to customary exceptions. Proceeds from borrowings made under the Term Loan may be used by the Borrowers for, among other things: (i) payment of fees and expenses associated with the closing of the Term Loan; (ii) payment of other outstanding indebtedness of the Borrowers under the Fifth Amended and Restated Loan Agreement; and (iii) working capital and other lawful corporate purposes of the Borrowers and their subsidiaries in accordance with the Term Loan. The Borrowers may elect to prepay all or any portion of the amounts owed under the Term Loan, subject to a prepayment fee. The Borrowers are required to make mandatory prepayments of amounts owed under the Term Loan in an amount equal to 100% of the proceeds received as a result of any of the following events, subject to certain adjustments: (i) the issuance of any equity securities by the Company that the Company contributes as additional common equity contributions to any Borrower; and (ii) the receipt by the Company, the Borrowers or any of their affiliates of any portion of the CARES Act Tax Refund Proceeds (as defined in the Term Loan), subject to a cap. Voluntary and mandatory prepayments will be applied to the remaining scheduled installments of principal due in respect of the Term Loan in the inverse order of maturity. The Term Loan contains customary covenants regarding the Borrowers and their subsidiaries that are generally based upon and are comparable to those contained in the Fifth Amended and Restated Loan Agreement including, without limitation: financial covenants, such as the maintenance of a minimum interest coverage ratio, subject to a covenant relief period through the fiscal quarter ending April 30, 2024, and a maximum leverage ratio; and negative covenants, such as limitations on indebtedness, liens, mergers, asset transfers, certain investing activities and other matters customarily restricted in such agreements. Most of these restrictions are subject to certain minimum thresholds and exceptions. The Term Loan also contains customary events of default, including, without limitation, payment defaults, material inaccuracy of representations and warranties, covenant defaults, bankruptcy and insolvency proceedings, cross-defaults to certain other agreements, and change of control. Second Amendment to Loan and Security Agreement . On February 21, 2023, the Company, the Borrowers, the guarantors party thereto, JPMorgan Chase Bank, N.A., as administrative agent and collateral agent, and the required lenders party thereto entered into the second amendment (the “Second Amendment”) to the Fifth Amended and Restated Loan Agreement. The Second Amendment, among other things, permits the Company and the Borrowers to enter into the Term Loan and made certain changes conforming to the Term Loan. Debt Covenants. On November 21, 2022, we entered into Amendment No. 1 (the "Amendment") to the Fifth Amended and Restated Loan and Security Agreement, dated as of March 29, 2021, which waived testing of the interest coverage covenants beginning with the third quarter of fiscal year 2023 and continuing until the date on which the Company delivers financial statements and a compliance certificate for the fiscal quarter ending April 30, 2024 (unless earlier terminated pursuant to the terms of the Amendment). After giving effect to the foregoing amendment, as of April 30, 2023, we were in compliance with the covenants in our Revolving Credit Facility. A summary of the significant financial covenants that govern our Revolving Credit Facility compared to our actual compliance status at April 30, 2023 is presented below: Actual Required Minimum/ Maximum Interest Coverage Ratio for the quarter must equal or exceed minimum Not Tested 1.00:1.00 Interest Coverage Ratio for the trailing two quarters must equal or exceed minimum Not Tested 1.50:1.00 Leverage Ratio must not exceed maximum 1.90:1.00 4.50:1.00 ABS Excluded Leverage Ratio must not exceed maximum 1.27:1.00 2.50:1.00 Capital Expenditures, net, must not exceed maximum $50.7 million $100.0 million All capitalized terms in the above table are defined in the Revolving Credit Facility and may or may not match directly to the financial statement captions in this document. The covenants are calculated quarterly, except for capital expenditures, which is calculated for a period of four consecutive fiscal quarters, as of the end of each fiscal quarter. |
Contingencies
Contingencies | 3 Months Ended |
Apr. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | ContingenciesWe are involved in routine litigation and claims, incidental to our business from time to time which, individually or in the aggregate, are not expected to have a material adverse effect on us. As required, we accrue estimates of the probable costs for the resolution of these matters. These estimates have been developed in consultation with counsel and are based upon an analysis of potential results, assuming a combination of litigation and settlement strategies. However, the results of these proceedings cannot be predicted with certainty, and changes in facts and circumstances could impact our estimate of reserves for litigation. The Company believes that any probable and reasonably estimable loss associated with the foregoing has been adequately reflected in the accompanying financial statements. |
Variable Interest Entity
Variable Interest Entity | 3 Months Ended |
Apr. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Variable Interest Entities | Variable Interest Entities From time to time, we securitize customer accounts receivables by transferring the receivables to various bankruptcy-remote VIEs. Under the terms of the respective securitization transactions, all cash collections and other cash proceeds of the customer receivables go first to the servicer and the holders of the asset-backed notes, and then to the residual equity holder. We retain the servicing of the securitized portfolio and receive a monthly fee of 4.75% (annualized) based on the outstanding balance of the securitized receivables, and we currently hold all of the residual equity. In addition, we, rather than the VIEs, will retain certain credit insurance income together with certain recoveries related to credit insurance and RSAs on charge-offs of the securitized receivables, which will continue to be reflected as a reduction of net charge-offs on a consolidated basis for as long as we consolidate the VIEs. We consolidate VIEs when we determine that we are the primary beneficiary of these VIEs, we have the power to direct the activities that most significantly impact the performance of the VIEs and our obligation to absorb losses and the right to receive residual returns are significant. The following table presents the assets and liabilities held by the VIEs (for legal purposes, the assets and liabilities of the VIEs will remain distinct from Conn’s, Inc.): (in thousands) April 30, January 31, Assets: Restricted cash $ 29,892 $ 38,727 Due from Conn’s, Inc., net 1,914 — Customer accounts receivable: Customer accounts receivable 370,423 506,811 Restructured accounts 54,235 46,626 Allowance for uncollectible accounts (76,847) (105,982) Allowance for no-interest option credit programs (3,055) (9,340) Deferred fees and origination costs (3,291) (4,851) Total customer accounts receivable, net 341,465 433,264 Total assets $ 373,271 $ 471,991 Liabilities: Accrued expenses $ 2,738 $ 3,475 Other liabilities 2,299 4,578 Due to Conn’s, Inc., net — 2,249 Long-term debt: 2021-A Class B Notes 26,426 54,597 2021-A Class C Notes 57,994 63,890 2022-A Class A Notes 48,734 117,935 2022-A Class B Notes 132,090 132,090 2022-A Class C Notes 63,090 63,090 328,334 431,602 Less: deferred debt issuance costs (16,417) (20,812) Total debt 311,917 410,790 Total liabilities $ 316,954 $ 421,092 |
Segment Information
Segment Information | 3 Months Ended |
Apr. 30, 2023 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information Operating segments are defined as components of an enterprise that engage in business activities and for which discrete financial information is available that is evaluated on a regular basis by the chief operating decision maker to make decisions about how to allocate resources and assess performance. We are a leading specialty retailer and offer a broad selection of quality, branded durable consumer goods and related services in addition to a proprietary credit solution for our core credit-constrained consumers. We have two operating segments: (i) retail and (ii) credit. Our operating segments complement one another. The retail segment operates primarily through our stores and website. Our retail segment product offerings include furniture and mattresses, home appliances, consumer electronics and home office products from leading global brands across a wide range of price points. Our credit segment offers affordable financing solutions to a large, under-served population of credit-constrained consumers who typically have limited credit alternatives. Our operating segments provide customers the opportunity to comparison shop across brands with confidence in our competitive prices as well as affordable monthly payment options, next day delivery and installation in the majority of our markets, and product repair service. The operating segments follow the same accounting policies used in our Condensed Consolidated Financial Statements. We evaluate a segment’s performance based upon operating income before taxes. Selling, general and administrative expenses (“SG&A”) includes the direct expenses of the retail and credit operations, allocated overhead expenses, and a charge to the credit segment to reimburse the retail segment for expenses it incurs related to occupancy, personnel, advertising and other direct costs of the retail segment, which benefit the credit operations by sourcing credit customers and collecting payments. The reimbursement received by the retail segment from the credit segment is calculated using an annual rate of 2.5% times the average outstanding portfolio balance for each applicable period. As of April 30, 2023, we operated retail stores in 15 states with no operations outside of the United States. No single customer accounts for more than 10% of our total revenues. Financial information by segment is presented in the following tables: Three Months Ended April 30, 2023 (in thousands) Retail Credit Eliminations Total Revenues: Furniture and mattress $ 76,368 $ — $ (242) $ 76,126 Home appliance 82,266 — (312) 81,954 Consumer electronics 25,649 — (249) 25,400 Home office 7,626 — (121) 7,505 Other 12,515 — (16) 12,499 Product sales 204,424 — (940) 203,484 Repair service agreement commissions 16,905 — — 16,905 Service revenues 2,158 — — 2,158 Total net sales 223,487 — (940) 222,547 Finance charges and other revenues 519 61,787 (283) 62,023 Total revenues 224,006 61,787 (1,223) 284,570 Costs and expenses: Cost of goods sold 148,561 115 (743) 147,933 Selling, general and administrative expense (1) 95,825 33,663 (250) 129,238 Provision for bad debts 107 28,802 — 28,909 Charges and credits (807) — — (807) Total costs and expenses 243,686 62,580 (993) 305,273 Operating income (loss) (19,680) (793) (230) (20,703) Interest expense — 16,379 — 16,379 Income (loss) before income taxes $ (19,680) $ (17,172) $ (230) $ (37,082) Three Months Ended April 30, 2022 (in thousands) Retail Credit Eliminations Total Revenues: Furniture and mattress $ 88,094 $ — $ — $ 88,094 Home appliance 109,728 — — 109,728 Consumer electronics 33,604 — — 33,604 Home office 10,189 — — 10,189 Other 8,358 — — 8,358 Product sales 249,973 — — 249,973 Repair service agreement commissions 19,836 — — 19,836 Service revenues 2,455 — — 2,455 Total net sales 272,264 — — 272,264 Finance charges and other revenues 271 67,286 — 67,557 Total revenues 272,535 67,286 — 339,821 Costs and expenses: Cost of goods sold 178,382 — — 178,382 Selling, general and administrative expense (1) 96,030 36,753 — 132,783 Provision for bad debts 179 14,552 — 14,731 Charges and credits — — — — Total costs and expenses 274,591 51,305 — 325,896 Operating income (loss) (2,056) 15,981 — 13,925 Interest expense — 5,521 — 5,521 Income (loss) before income taxes $ (2,056) $ 10,460 $ — $ 8,404 April 30, 2023 April 30, 2022 (in thousands) Retail Credit Total Retail Credit Total Total assets $ 626,138 $ 1,049,970 $ 1,676,108 $ 699,685 $ 1,028,048 $ 1,727,733 (1) For the three months ended April 30, 2023 and 2022, the amount of corporate overhead allocated to each segment reflected in SG&A expense was $8.8 million and $9.6 million, respectively. For the three months ended April 30, 2023 and 2022, the amount of reimbursement made to the retail segment by the credit segment was $6.3 million and $6.8 million, respectively. |
Stockholders_ Equity
Stockholders’ Equity | 3 Months Ended |
Apr. 30, 2023 | |
Stockholders' Equity Note [Abstract] | |
Stockholders’ Equity | Stock RepurchasesOn December 15, 2021, our Board of Directors approved a stock repurchase program pursuant to which we had the authorization to repurchase up to $150.0 million of our outstanding common stock. The stock repurchase program expires on December 14, 2022. During the three months ended April 30, 2023, we did not repurchase any shares of our common stock. During the three months ended April 30, 2023, we repurchased 3,316,000 shares of our common stock at an average weighted cost per share of $20.57 for an aggregate amount of $68.2 million. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Apr. 30, 2023 | |
Accounting Policies [Abstract] | |
Business and Basis of Presentation | Business. Conn’s, Inc., a Delaware corporation, is a holding company with no independent assets or operations other than its investments in its subsidiaries. References to “we,” “our,” “us,” “the Company,” “Conn’s” or “CONN” refer to Conn’s, Inc. and, as apparent from the context, its subsidiaries. Conn’s is a leading specialty retailer that offers a broad selection of quality, branded durable consumer goods and related services in addition to proprietary credit solutions for its core credit-constrained consumers. We operate an integrated and scalable business through our retail stores and website. Our complementary product offerings include furniture and mattresses, home appliances, consumer electronics and home office products from leading global brands across a wide range of price points. Our credit offering provides financing solutions to a large, under-served population of credit-constrained consumers who typically have limited credit alternatives. We operate two reportable segments: retail and credit. Our retail stores bear the “Conn’s HomePlus” name with all of our stores providing the same products and services to a common customer group. Our stores follow the same procedures and methods in managing their operations. Our retail business and credit business are operated independently from each other. The credit segment is dedicated to providing short- and medium-term financing to our retail customers. The retail segment is not involved in credit approval decisions or collection efforts. Our management evaluates performance and allocates resources based on the operating results of the retail and credit segments. Basis of Presentation. The accompanying unaudited Condensed Consolidated Financial Statements of Conn’s, Inc. and its wholly-owned subsidiaries, including its Variable Interest Entities (“VIEs”), have been prepared by management in accordance with U.S. generally accepted accounting principles (“GAAP”) and prevailing industry practice for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, we do not include all of the information and footnotes required by GAAP for complete financial statements. The accompanying financial statements reflect all adjustments that are, in the opinion of management, necessary for a fair presentation of the results for the interim periods presented. All such adjustments are of a normal recurring nature. The condensed consolidated financial position, results of operations and cash flows for these interim periods are not necessarily indicative of the results that may be expected in future periods. The balance sheet at January 31, 2023 has been derived from the audited financial statements at that date. The financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the fiscal year ended January 31, 2023 (the “2023 Form 10-K”) filed with the United States Securities and Exchange Commission (the “SEC”) on March 29, 2023. |
Fiscal Year | Fiscal Year. Our fiscal year ends on January 31. References to a fiscal year refer to the calendar year in which the fiscal year ends. |
Principles of Consolidation | Principles of Consolidation. The Condensed Consolidated Financial Statements include the accounts of Conn’s, Inc. and its wholly-owned subsidiaries. All material intercompany transactions and balances have been eliminated in consolidation. |
Variable Interest Entity | Variable Interest Entities. VIEs are consolidated if the Company is the primary beneficiary. The primary beneficiary of a VIE is the party that has (i) the power to direct the activities that most significantly impact the performance of the VIE and (ii) the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. We securitize customer accounts receivables by transferring the receivables to various bankruptcy-remote VIEs. We retain the servicing of the securitized portfolio and have a variable interest in each corresponding VIE by holding the residual equity. We have determined that we are the primary beneficiary of each respective VIE because (i) our servicing responsibilities for the securitized portfolio give us the power to direct the activities that most significantly impact the performance of the VIE and (ii) our variable interest in the VIE gives us the obligation to absorb losses and the right to receive residual returns that potentially could be significant. As a result, we consolidate the respective VIEs within our Condensed Consolidated Financial Statements. Refer to Note 5, Debt and Financing Lease Obligations , and Note 7, Variable Interest Entities , for additional information. |
Use of Estimates | Use of Estimates. The preparation of financial statements in accordance with GAAP requires management to make informed judgments and estimates that affect the reported amounts of assets, liabilities, revenues and expenses, and the disclosure of contingent assets and liabilities. Changes in facts and circumstances or additional information may result in revised estimates, and actual results may differ, even significantly, from these estimates. Management evaluates its estimates and related assumptions regularly, including those related to the allowance for doubtful accounts and allowances for no-interest option credit programs, which are particularly sensitive given the size of our customer portfolio balance. |
Cash and Cash Equivalents and Restricted Cash | Cash and Cash Equivalents. As of April 30, 2023 and January 31, 2023, cash and cash equivalents included cash and credit card deposits in transit. Credit card deposits in transit included in cash and cash equivalents were $6.8 million and $5.2 million as of April 30, 2023 and January 31, 2023, respectively. |
Customer Accounts Receivable | Customer Accounts Receivable. Customer accounts receivable reported in the Condensed Consolidated Balance Sheet includes total receivables managed, including both those transferred to the VIEs and those not transferred to the VIEs. Customer accounts receivable are recognized at the time the customer takes possession of the product. Expected lifetime losses on customer accounts receivable are recognized upon origination through an allowance for credit losses account that is deducted from the customer account receivable balance and presented net. Customer accounts receivable include the net of unamortized deferred fees charged to customers and origination costs. Customer receivables are considered delinquent if a payment has not been received on the scheduled due date. Accounts that are delinquent more than 209 days as of the end of a month are charged-off against the allowance for doubtful accounts along with interest accrued subsequent to the last payment. |
Interest Income on Customer Accounts Receivable | Interest Income on Customer Accounts Receivable. Interest income, which includes interest income and amortization of deferred fees and origination costs, is recorded using the interest method and is reflected in finance charges and other revenues. Typically, interest income is recorded until the customer account is paid off or charged-off and we provide an allowance for estimated uncollectible interest. We reserve for interest that is more than 60 days past due. Any contractual interest income received from customers in excess of the interest income calculated using the interest method is recorded as deferred revenue on our balance sheets. At April 30, 2023 and January 31, 2023, there was $8.0 million and $8.1 million, respectively, of deferred interest included in deferred revenues and other credits and other long-term liabilities. The deferred interest will ultimately be brought into income as the accounts pay off or charge-off. We offer a 12-month no-interest option program. If the customer is delinquent in making a scheduled monthly payment or does not repay the principal in full by the end of the no-interest option program period (grace periods are provided), the account does not qualify for the no-interest provision and none of the interest earned is waived. Interest income is recognized based on estimated accrued interest earned to date on all no-interest option finance programs with an offsetting reserve for those customers expected to satisfy the requirements of the program based on our historical experience. We place accounts in non-accrual status when legally required. Payments received on non-accrual loans are applied to principal and reduce the balance of the loan. At April 30, 2023 and January 31, 2023, the carrying value of customer accounts receivable in non-accrual status was $8.1 million and $7.9 million, respectively. At April 30, 2023 and January 31, 2023, the carrying value of customer accounts receivable that were past due 90 days or more and still accruing interest totaled $83.5 million and $92.2 million, respectively. At April 30, 2023 and January 31, 2023, the carrying value of customer accounts receivable in a bankruptcy status that were less than 60 days past due of $7.2 million and $7.1 million, respectively, were included within the customer receivables balance carried in non-accrual status. |
Financing Receivable, Allowance for Credit Losses, Policy for Uncollectible Amounts | Allowance for Doubtful Accounts. The determination of the amount of the allowance for credit losses is, by nature, highly complex and subjective. Future events that are inherently uncertain could result in material changes to the level of the allowance for credit losses. General economic conditions, changes to state or federal regulations and a variety of other factors that affect the ability of borrowers to service their debts or our ability to collect will impact the future performance of the portfolio. We establish an allowance for credit losses, including estimated uncollectible interest, to cover expected credit losses on our customer accounts receivable resulting from the failure of customers to make contractual payments. Our customer accounts receivable portfolio balance consists of a large number of relatively small, homogeneous accounts. None of our accounts are large enough to warrant individual evaluation for impairment. The allowance for credit losses is measured on a collective (pool) basis where similar risk characteristics exist. The allowance for credit losses is determined for each pool and added to the pool’s carrying amount to establish a new amortized cost basis. We use a risk-based, pool-level segmentation framework to calculate the expected loss rate. This framework is based on our historical gross charge-off history. In addition to adjusted historical gross charge-off rates, estimates of post-charge-off recoveries, including cash payments from customers, sales tax recoveries from taxing jurisdictions, and payments received under credit insurance and repair service agreement (“RSA”) policies are also considered. We also consider forward-looking economic forecasts based on a statistical analysis of economic factors (specifically, forecast of unemployment rates over the reasonable and supportable forecasting period). To the extent that situations and trends arise which are not captured in our model, management will layer on additional qualitative adjustments. Pursuant to ASC 326 requirements, the Company uses a 24-month reasonable and supportable forecast period for the customer accounts receivable portfolio. We estimate losses beyond the 24-month forecast period based on historic loss rates experienced over the life of our historic loan portfolio by loan pool type. We revisit our measurement methodology and assumption annually, or more frequently if circumstances warrant. |
Debt Issuance Costs and Loss on Extinguishment of Debt | Debt Issuance Costs. Costs that are direct and incremental to debt issuance are deferred and amortized to interest expense using the effective interest method over the expected life of the debt. All other costs related to debt issuance are expensed as incurred. We present debt issuance costs associated with long-term debt as a reduction of the carrying amount of the debt. Unamortized costs related to the Revolving Credit Facility, as defined in Note 5, Debt and Financing Lease Obligations , are included in other assets on our Condensed Consolidated Balance Sheet and were $4.8 million and $5.4 million as of April 30, 2023 and January 31, 2023, respectively. |
Income Taxes | Income Taxes. For the three months ended April 30, 2023 and 2022, we utilized the estimated annual effective tax rate based on our estimated fiscal year 2024 and 2023 pre-tax income, respectively, in determining income tax expense. Provision for income taxes for interim periods is based on an estimated annual income tax rate, adjusted for discrete tax items. As a result, our interim effective tax rates may vary significantly from the statutory tax rate and the annual effective tax rate. For the three months ended April 30, 2023 and 2022, the effective tax rate was 4.6% and 26.0%, respectively. The primary factor affecting the decrease in our effective tax rate for the three months ended April 30, 2023 was the impact of a valuation allowance on deferred tax assets, state taxes and compensation expense. |
Earnings per Share | Earnings per Share. Basic earnings per share for a particular period is calculated by dividing net income by the weighted-average number of common shares outstanding during the period. Diluted earnings per share includes the dilutive effects of any stock options, RSUs and PSUs, which are calculated using the treasury-stock method. The following table sets forth the shares outstanding for the earnings per share calculations: Three Months Ended 2023 2022 Weighted-average common shares outstanding - Basic 24,134,381 24,801,987 Dilutive effect of stock options, PSUs and RSUs — 511,626 Weighted-average common shares outstanding - Diluted 24,134,381 25,313,613 |
Fair Value of Financial Instruments | Fair Value of Financial Instruments. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Assets and liabilities recorded at fair value are categorized using defined hierarchical levels related to subjectivity associated with the inputs to fair value measurements as follows: • Level 1 – Inputs represent unadjusted quoted prices in active markets for identical assets or liabilities. • Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly (for example, quoted market prices for similar assets or liabilities in active markets or quoted market prices for identical assets or liabilities in markets not considered to be active, inputs other than quoted prices that are observable for the asset or liability, or market-corroborated inputs). • Level 3 – Inputs that are not observable from objective sources such as our internally developed assumptions used in pricing an asset or liability (for example, an estimate of future cash flows used in our internally developed present value of future cash flows model that underlies the fair-value measurement). In determining fair value, we use observable market data when available, or models that incorporate observable market data. When we are required to measure fair value and there is not a market-observable price for the asset or liability or for a similar asset or liability, we use the cost or income approach depending on the quality of information available to support management’s assumptions. The cost approach is based on management’s best estimate of the current asset replacement cost. The income approach is based on management’s best assumptions regarding expectations of future net cash flows and discounts the expected cash flows using a commensurate risk-adjusted discount rate. Such evaluations involve significant judgment, and the results are based on expected future events or conditions such as sales prices, economic and regulatory climates, and other factors, most of which are often outside of management’s control. However, we believe assumptions used reflect a market participant’s view of long-term prices, costs, and other factors and are consistent with assumptions used in our business plans and investment decisions. In arriving at fair-value estimates, we use relevant observable inputs available for the valuation technique employed. If a fair-value measurement reflects inputs at multiple levels within the hierarchy, the fair-value measurement is characterized based on the lowest level of input that is significant to the fair-value measurement. The fair value of cash and cash equivalents, restricted cash and accounts payable approximate their carrying amounts because of the short maturity of these instruments. The fair value of customer accounts receivable, determined using a Level 3 discounted cash flow analysis, approximates their carrying value, net of the allowance for doubtful accounts. The fair value of our Revolving Credit Facility approximates carrying value based on the current borrowing rate for similar types of borrowing arrangements. At April 30, 2023, the fair value of the asset backed notes was $307.8 million as compared to the carrying value of $328.3 million and was determined using Level 2 inputs based on inactive trading activity. |
Deferred Revenue | Deferred Revenue. Deferred revenue related to contracts with customers consists of deferred customer deposits and deferred RSA administration fees. During the three months ended April 30, 2023, we recognized $3.2 million of revenue for customer deposits deferred as of January 31, 2023. During the three months ended April 30, 2023, we recognized $0.8 million of revenue for RSA administrative fees deferred as of January 31, 2023. |
Recent Accounting Pronouncements Adopted and Recent Accounting Pronouncements Yet To Be Adopted | Recent Accounting Pronouncements Adopted. Financial Instruments - Troubled Debt Restructurings and Vintage Disclosures. In March 2022, the FASB issued Accounting Standards Update ("ASU") 2022-02 ("ASU 2022-02"), Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures, an update that eliminates the accounting guidance for troubled debt |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Apr. 30, 2023 | |
Accounting Policies [Abstract] | |
RSUs, PSUs and stock options granted during the period | The following table sets forth the RSUs and PSUs granted during the three months ended April 30, 2023 and 2022: Three Months Ended 2023 2022 RSUs (1) 746,412 394,380 PSUs (2) 174,290 176,509 Total stock awards granted 920,702 570,889 Aggregate grant date fair value (in thousands) $ 9,157 $ 14,691 (1) The RSUs issued during the three months ended April 30, 2023 and 2022 are scheduled to vest ratably over periods of three years to four years from the date of grant with the exception of RSU grants issued to the Board of Directors. (2) The weighted-average assumptions used in the Monte Carlo model for the PSUs granted during the three months ended April 30, 2023 included expected volatility of 73.0%, an expected term of 3 years and risk-free interest rate of 3.75%. No dividend yield was included in the weighted-average assumptions for the PSUs granted during the three months ended April 30, 2023. The weighted-average assumptions used in the Monte Carlo model for the PSUs granted during the three months ended April 30, 2022 included expected volatility of 78.0%-80.0% an expected term of 3 years and risk-free interest rate of 1.39%- 2.58% No dividend yield was included in the weighted average assumptions for the PSUs granted during the three months ended April 30, 2022. |
Shares outstanding for the earnings per share calculations | The following table sets forth the shares outstanding for the earnings per share calculations: Three Months Ended 2023 2022 Weighted-average common shares outstanding - Basic 24,134,381 24,801,987 Dilutive effect of stock options, PSUs and RSUs — 511,626 Weighted-average common shares outstanding - Diluted 24,134,381 25,313,613 |
Customer Accounts Receivable (T
Customer Accounts Receivable (Tables) | 3 Months Ended |
Apr. 30, 2023 | |
Receivables [Abstract] | |
Allowance for doubtful accounts and uncollectible interest for customer receivables | Customer accounts receivable consisted of the following: (in thousands) April 30, January 31, Customer accounts receivable (1) (2) $ 983,324 $ 1,025,364 Deferred fees and origination costs, net (11,211) (11,699) Allowance for no-interest option credit programs (17,449) (18,753) Allowance for uncollectible interest and fees (17,382) (20,007) Carrying value of customer accounts receivable 937,282 974,905 Allowance for credit losses (3) (153,416) (164,168) Carrying value of customer accounts receivable, net of allowance for credit losses 783,866 810,737 Short-term portion of customer accounts receivable, net (417,359) (421,683) Long-term customer accounts receivable, net $ 366,507 $ 389,054 (1) As of April 30, 2023 and January 31, 2023, the customer accounts receivable balance included $24.6 million and $27.5 million, respectively, in interest receivable. Interest receivable outstanding, net of the allowance for uncollectible interest, as of April 30, 2023 and January 31, 2023 was $7.2 million and $7.5 million, respectively. (2) As of April 30, 2023 and January 31, 2023, the carrying value of customer accounts receivable past due one day or greater was $275.9 million and $290.4 million, respectively. These amounts include the 60+ days past due balances shown above. Further, the carrying value of customer accounts receivable which received a re-age at least once during the lifetime of the loan was $155.1 million and $160.9 million as of April 30, 2023 and January 31, 2023, respectively. (3) Our current methodology to estimate expected credit losses utilized macroeconomic forecasts as of April 30, 2023 and January 31, 2023. Our forecast utilized economic projections from a major rating service. |
Schedule of allowance for credit losses | The allowance for credit losses included in the current and long-term portion of customer accounts receivable, net as shown in the Condensed Consolidated Balance Sheet were as follows: (in thousands) April 30, 2023 January 31, 2023 Customer accounts receivable - current $ 507,064 $ 517,611 Allowance for credit losses for customer accounts receivable - current (89,705) (95,928) Customer accounts receivable, net of allowances 417,359 421,683 Customer accounts receivable - non current 447,740 477,301 Allowance for credit losses for customer accounts receivable - non current (81,233) (88,247) Long-term portion of customer accounts receivable, net of allowances 366,507 389,054 Total customer accounts receivable, net $ 783,866 $ 810,737 |
Activity in the allowance for doubtful accounts and uncollectible interest for customer receivables | The following presents the activity in our allowance for credit losses and uncollectible interest for customer receivables: Three Months Ended April 30, 2023 Three Months Ended April 30, 2022 (in thousands) Customer Customer Allowance at beginning of period $ 150,579 $ 33,595 $ 184,174 $ 165,044 $ 43,976 $ 209,020 ASU 2022-02 Adjustment — (372) (372) — — — Adjusted allowance at beginning of period 150,579 33,223 183,802 165,044 43,976 209,020 Provision for credit loss expense (1) 27,522 8,875 36,397 18,298 5,412 23,710 Principal charge-offs (2) (39,522) (9,404) (48,926) (31,622) (12,470) (44,092) Interest charge-offs (8,393) (1,950) (10,343) (7,656) (3,017) (10,673) Recoveries (2) 8,064 1,874 9,938 8,341 3,289 11,630 Allowance at end of period $ 138,250 $ 32,618 $ 170,868 $ 152,405 $ 37,190 $ 189,595 Average total customer portfolio balance $ 918,678 $ 82,568 $ 1,001,246 $ 997,104 $ 97,641 $ 1,094,745 (1) Includes provision for uncollectible interest, which is included in finance charges and other revenues, and changes in expected future recoveries. (2) Charge-offs include the principal amount of losses (excluding accrued and unpaid interest). Recoveries include the principal amount collected during the period for previously charged-off balances. Net charge-offs are calculated as the net of principal charge-offs and recoveries. |
Financing Receivable, Past Due [Table Text Block] | We manage our customer accounts receivable portfolio using delinquency as a key credit quality indicator. The following table presents the delinquency distribution of the carrying value of customer accounts receivable by calendar year of origination. The information is presented as of April 30, 2023: (in thousands) Delinquency Bucket 2023 2022 2021 2020 Prior Total % of Total Current $ 176,556 $ 324,579 $ 134,066 $ 22,487 $ 3,680 $ 661,368 70.6 % 1-30 15,800 63,347 39,623 9,341 2,575 130,686 13.9 % 31-60 3,722 17,060 11,950 3,066 1,151 36,949 3.9 % 61-90 1,568 11,743 7,800 2,166 845 24,122 2.6 % 91+ — 41,677 31,347 7,703 3,430 84,157 9.0 % Total $ 197,646 $ 458,406 $ 224,786 $ 44,763 $ 11,681 $ 937,282 100.0 % Gross Charge-offs for the three months ended April 30, 2023 $ — $ 25,489 $ 31,194 $ 9,087 $ 4,760 $ 70,530 |
Financing Receivable, Modified | The following table shows the amortized cost basis of loans modified during the three months ended April 30, 2023 (since the adoption of ASC 2022-02) to borrowers experiencing financial difficulty disaggregated by modification type: (in thousands) Modification Type Carrying Value as of April 30, 2023 % of Carrying Value of Customer Accounts Receivable Significantly re-aged $ 12,655 1.4 % Balance forgiveness 165 — % Refinance 181 — % Combination - significantly re-aged & balance forgiveness 246 — % Total modifications $ 13,247 1.4 % The Company monitors the performance of modified loans to borrowers experiencing financial difficulty. The following table depicts the delinquency distribution of loans that were modified on or after February 1, 2023, the date we adopted ASU 2022-02: (in thousands) Current 1 - 30 31 - 60 61 - 90 91+ Total Significantly re-aged $ 8,595 $ 3,028 $ 908 $ 56 $ 68 $ 12,655 Balance forgiveness 36 29 25 4 71 165 Refinance 107 58 9 7 — 181 Combination - significantly re-aged & balance forgiveness 141 81 18 — 6 246 Total $ 8,879 $ 3,196 $ 960 $ 67 $ 145 $ 13,247 Three months ended April 30, 2023 Significantly re-aged Payment delay duration (in months) 4 to 8 Balance forgiveness Balance forgiven (in thousands) $ 27 Refinance Weighted-average interest rate reduction 5.43 % Term extension duration (in months) 27 Balance forgiven (in thousands) $ 11 Combination - significantly re-aged & balance forgiveness Payment delay duration (in months) 4 to 8 Balance forgiven (in thousands) $ 26 |
Charges and Credits (Tables)
Charges and Credits (Tables) | 3 Months Ended |
Apr. 30, 2023 | |
Charges and Credits [Abstract] | |
Schedule of Charges and Credits | Charges and credits consisted of the following: Three Months Ended (in thousands) 2023 2022 Store closure $ 2,340 $ — Asset sale (3,147) — Total charges and credits $ (807) $ — |
Finance Charges and Other Rev_2
Finance Charges and Other Revenue (Tables) | 3 Months Ended |
Apr. 30, 2023 | |
Supplemental Disclosure of Finance Charges and Other Revenue [Abstract] | |
Finance Charges And Other Revenue [Table Text Block] | Finance charges and other revenues consisted of the following: Three Months Ended (in thousands) 2023 2022 Interest income and fees $ 57,189 $ 62,714 Insurance income 4,440 4,572 Other revenues 394 271 Total finance charges and other revenues $ 62,023 $ 67,557 |
Debt and Financing Lease Obli_2
Debt and Financing Lease Obligations (Tables) | 3 Months Ended |
Apr. 30, 2023 | |
Debt Disclosure [Abstract] | |
Long-term Debt | Debt and financing lease obligations consisted of the following: (in thousands) April 30, January 31, Revolving credit facility $ 206,000 $ 221,000 Term Loan 100,000 — 2021-A VIE Asset-backed Class B Notes 26,426 54,597 2021-A VIE Asset-backed Class C Notes 57,994 63,890 2022-A VIE Asset-backed Class A Notes 48,734 117,935 2022-A VIE Asset-backed Class B Notes 132,090 132,090 2022-A VIE Asset-backed Class C Notes 63,090 63,090 Financing lease obligations 4,945 5,226 Total debt and financing lease obligations 639,279 657,828 Less: Deferred debt issuance costs (23,033) (20,812) Current maturities of long-term debt and financing lease obligations (869) (937) Long-term debt and financing lease obligations $ 615,377 $ 636,079 |
Schedule of Asset-backed Notes | The asset-backed notes outstanding as of April 30, 2023 consisted of the following: (dollars in thousands) Asset-Backed Notes Original Principal Amount Original Net Proceeds (1) Current Principal Amount Issuance Date Maturity Date Contractual Interest Rate Effective Interest Rate (2) 2021-A Class B Notes 66,090 65,635 26,426 11/23/2021 5/15/2026 2.87% 3.74% 2021-A Class C Notes 63,890 63,450 57,994 11/23/2021 5/15/2026 4.59% 5.16% 2022-A Class A Notes 275,600 273,731 48,734 7/21/2022 12/15/2026 5.87% 9.77% 2022-A Class B Notes 132,090 129,050 132,090 7/21/2022 12/15/2026 9.52% 10.51% 2022-A Class C Notes 63,090 43,737 63,090 11/30/2022 12/15/2026 0.00% 19.74% Total $ 600,760 $ 575,603 $ 328,334 (1) After giving effect to debt issuance costs. |
Covenant Compliance | A summary of the significant financial covenants that govern our Revolving Credit Facility compared to our actual compliance status at April 30, 2023 is presented below: Actual Required Minimum/ Maximum Interest Coverage Ratio for the quarter must equal or exceed minimum Not Tested 1.00:1.00 Interest Coverage Ratio for the trailing two quarters must equal or exceed minimum Not Tested 1.50:1.00 Leverage Ratio must not exceed maximum 1.90:1.00 4.50:1.00 ABS Excluded Leverage Ratio must not exceed maximum 1.27:1.00 2.50:1.00 Capital Expenditures, net, must not exceed maximum $50.7 million $100.0 million |
Variable Interest Entities (Tab
Variable Interest Entities (Tables) | 3 Months Ended |
Apr. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of assets and liabilities held by the VIE | The following table presents the assets and liabilities held by the VIEs (for legal purposes, the assets and liabilities of the VIEs will remain distinct from Conn’s, Inc.): (in thousands) April 30, January 31, Assets: Restricted cash $ 29,892 $ 38,727 Due from Conn’s, Inc., net 1,914 — Customer accounts receivable: Customer accounts receivable 370,423 506,811 Restructured accounts 54,235 46,626 Allowance for uncollectible accounts (76,847) (105,982) Allowance for no-interest option credit programs (3,055) (9,340) Deferred fees and origination costs (3,291) (4,851) Total customer accounts receivable, net 341,465 433,264 Total assets $ 373,271 $ 471,991 Liabilities: Accrued expenses $ 2,738 $ 3,475 Other liabilities 2,299 4,578 Due to Conn’s, Inc., net — 2,249 Long-term debt: 2021-A Class B Notes 26,426 54,597 2021-A Class C Notes 57,994 63,890 2022-A Class A Notes 48,734 117,935 2022-A Class B Notes 132,090 132,090 2022-A Class C Notes 63,090 63,090 328,334 431,602 Less: deferred debt issuance costs (16,417) (20,812) Total debt 311,917 410,790 Total liabilities $ 316,954 $ 421,092 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Apr. 30, 2023 | |
Segment Reporting [Abstract] | |
Financial information by segment | Financial information by segment is presented in the following tables: Three Months Ended April 30, 2023 (in thousands) Retail Credit Eliminations Total Revenues: Furniture and mattress $ 76,368 $ — $ (242) $ 76,126 Home appliance 82,266 — (312) 81,954 Consumer electronics 25,649 — (249) 25,400 Home office 7,626 — (121) 7,505 Other 12,515 — (16) 12,499 Product sales 204,424 — (940) 203,484 Repair service agreement commissions 16,905 — — 16,905 Service revenues 2,158 — — 2,158 Total net sales 223,487 — (940) 222,547 Finance charges and other revenues 519 61,787 (283) 62,023 Total revenues 224,006 61,787 (1,223) 284,570 Costs and expenses: Cost of goods sold 148,561 115 (743) 147,933 Selling, general and administrative expense (1) 95,825 33,663 (250) 129,238 Provision for bad debts 107 28,802 — 28,909 Charges and credits (807) — — (807) Total costs and expenses 243,686 62,580 (993) 305,273 Operating income (loss) (19,680) (793) (230) (20,703) Interest expense — 16,379 — 16,379 Income (loss) before income taxes $ (19,680) $ (17,172) $ (230) $ (37,082) Three Months Ended April 30, 2022 (in thousands) Retail Credit Eliminations Total Revenues: Furniture and mattress $ 88,094 $ — $ — $ 88,094 Home appliance 109,728 — — 109,728 Consumer electronics 33,604 — — 33,604 Home office 10,189 — — 10,189 Other 8,358 — — 8,358 Product sales 249,973 — — 249,973 Repair service agreement commissions 19,836 — — 19,836 Service revenues 2,455 — — 2,455 Total net sales 272,264 — — 272,264 Finance charges and other revenues 271 67,286 — 67,557 Total revenues 272,535 67,286 — 339,821 Costs and expenses: Cost of goods sold 178,382 — — 178,382 Selling, general and administrative expense (1) 96,030 36,753 — 132,783 Provision for bad debts 179 14,552 — 14,731 Charges and credits — — — — Total costs and expenses 274,591 51,305 — 325,896 Operating income (loss) (2,056) 15,981 — 13,925 Interest expense — 5,521 — 5,521 Income (loss) before income taxes $ (2,056) $ 10,460 $ — $ 8,404 April 30, 2023 April 30, 2022 (in thousands) Retail Credit Total Retail Credit Total Total assets $ 626,138 $ 1,049,970 $ 1,676,108 $ 699,685 $ 1,028,048 $ 1,727,733 (1) For the three months ended April 30, 2023 and 2022, the amount of corporate overhead allocated to each segment reflected in SG&A expense was $8.8 million and $9.6 million, respectively. For the three months ended April 30, 2023 and 2022, the amount of reimbursement made to the retail segment by the credit segment was $6.3 million and $6.8 million, respectively. |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Narrative (Details) | 3 Months Ended | |||
Apr. 30, 2023 USD ($) segment | Apr. 30, 2022 USD ($) | Jan. 31, 2023 USD ($) | Jan. 31, 2022 USD ($) | |
Debt Instrument [Line Items] | ||||
Number of operating segments | segment | 2 | |||
Cash and Cash Equivalents and Restricted Cash | ||||
Cash and cash equivalents include credit card deposits in-transit | $ 6,800,000 | $ 5,200,000 | ||
Restricted cash | 32,002,000 | 40,837,000 | ||
Receivables [Abstract] | ||||
Long-term customer accounts receivable, net | 366,507,000 | 389,054,000 | ||
Accounts Receivable, Allowance for Credit Loss | 170,868,000 | $ 189,595,000 | 184,174,000 | $ 209,020,000 |
Interest Income on Customer Accounts Receivable | ||||
Deferred revenue | 8,000,000 | 8,100,000 | ||
Nonaccrual status | 8,100,000 | 7,900,000 | ||
90 days past due and still accruing | 83,500,000 | 92,200,000 | ||
Financing Receivable, No-Interest Option Program Period | 12 | |||
Bankruptcy status, less than 60 days delinquent | 7,200,000 | 7,100,000 | ||
Debt Issuance Costs | ||||
Deferred debt issuance costs | 23,033,000 | 20,812,000 | ||
Gain (Loss) on Extinguishment of Debt [Abstract] | ||||
Gain (Loss) on Extinguishment of Debt | $ 0 | $ 0 | ||
Income Taxes | ||||
Effective tax rate | 4.60% | 26% | ||
Stock-based Compensation | ||||
Stock-based compensation expense | $ 2,964,000 | $ 3,409,000 | ||
Fair Value of Financial Instruments | ||||
Long-term Debt | 328,334,000 | |||
Restructured Accounts | ||||
Receivables [Abstract] | ||||
Accounts Receivable, Allowance for Credit Loss | 32,618,000 | $ 37,190,000 | 33,595,000 | $ 43,976,000 |
Customer Deposits | ||||
Deferred Revenue | ||||
Deferred revenue, revenue recognized | 3,200,000 | |||
RSA Administration Fees | ||||
Deferred Revenue | ||||
Deferred revenue, revenue recognized | 800,000 | |||
Secured Debt | ||||
Fair Value of Financial Instruments | ||||
Debt fair value | 307,800,000 | |||
Revolving Credit Facility | ||||
Debt Issuance Costs | ||||
Deferred debt issuance costs | 4,800,000 | 5,400,000 | ||
Securitized Receivables Servicer | ||||
Cash and Cash Equivalents and Restricted Cash | ||||
Restricted cash | 5,200,000 | 4,200,000 | ||
Collateral Held by VIE | ||||
Cash and Cash Equivalents and Restricted Cash | ||||
Restricted cash | 24,700,000 | $ 33,600,000 | ||
Secured Debt | ||||
Fair Value of Financial Instruments | ||||
Long-term Debt | $ 328,300,000 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Stock-based Compensation (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 30, 2023 | Apr. 30, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock awards granted (in shares) | 920,702 | 570,889 |
Aggregate grant date fair value | $ 9,157 | $ 14,691 |
Dividend yield | 0% | 0% |
Stock-based compensation expense | $ 2,964 | $ 3,409 |
Share-Based Payment Arrangement | Stock-based Compensation. During the three months ended April 30, 2023, the Company granted performance stock awards (“PSUs”) and restricted stock awards (“RSUs”). The awards had a combined aggregate grant date fair value of approximately $9.2 million. The PSUs will vest in fiscal year 2027, if at all, upon certification by the Compensation Committee of the Board of Directors of satisfaction of certain total stockholder return performance conditions over the three fiscal years commencing with fiscal year 2024. The RSUs will vest ratably, over periods of three years from the date of grant. Stock-based compensation expense is recorded, net of actual forfeitures, for share-based compensation awards over the requisite service period using the straight-line method. For equity-classified share-based compensation awards, expense is recognized based on the grant-date fair value. For stock option grants, we use the Black-Scholes model to determine fair value. For grants of restricted stock units, the fair value of the grant is the market value of our stock at the date of issuance. For grants of performance-based restricted stock units, the fair value is the market value of our stock at the date of issuance adjusted for the market condition using a Monte Carlo model. The following table sets forth the RSUs and PSUs granted during the three months ended April 30, 2023 and 2022: Three Months Ended 2023 2022 RSUs (1) 746,412 394,380 PSUs (2) 174,290 176,509 Total stock awards granted 920,702 570,889 Aggregate grant date fair value (in thousands) $ 9,157 $ 14,691 (1) The RSUs issued during the three months ended April 30, 2023 and 2022 are scheduled to vest ratably over periods of three years to four years from the date of grant with the exception of RSU grants issued to the Board of Directors. (2) The weighted-average assumptions used in the Monte Carlo model for the PSUs granted during the three months ended April 30, 2023 included expected volatility of 73.0%, an expected term of 3 years and risk-free interest rate of 3.75%. No dividend yield was included in the weighted-average assumptions for the PSUs granted during the three months ended April 30, 2023. The weighted-average assumptions used in the Monte Carlo model for the PSUs granted during the three months ended April 30, 2022 included expected volatility of 78.0%-80.0% an expected term of 3 years and risk-free interest rate of 1.39%- 2.58% No dividend yield was included in the weighted average assumptions for the PSUs granted during the three months ended April 30, 2022. | |
Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 3 years | |
Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 4 years | |
(RSUs) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
RSUs and PSUs (in shares) | 746,412 | 394,380 |
(RSUs) | Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 3 years | |
(PSUs) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected volatility rate | 78% | |
Expected term | 3 years | 3 years |
Risk free interest rate | 1.39% | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Risk Free Interest Rate, Minimum | 3.75% | |
(PSUs) | Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected volatility rate | 73% | |
Risk free interest rate | 2.58% | |
(PSUs) | Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected volatility rate | 80% | |
Performance Shares | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
RSUs and PSUs (in shares) | 174,290 | 176,509 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Earnings per Share (Details) - shares | 3 Months Ended | |
Apr. 30, 2023 | Apr. 30, 2022 | |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||
Weighted average common shares outstanding - Basic (in shares) | 24,134,381 | 24,801,987 |
Dilutive effect of stock options, RSUs and PSUs (in shares) | 0 | 511,626 |
Weighted average common shares outstanding - Diluted (in shares) | 24,134,381 | 25,313,613 |
Restricted Stock Units And PSUs | ||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||
Weighted average number of stock options and restricted stock units not included in the calculation of the dilutive effect of stock options and restricted stock units (in shares) | 2,163,896 | 901,546 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Recent Accounting Pronouncements (Details) - USD ($) $ in Thousands | Apr. 30, 2023 | Jan. 31, 2023 | Apr. 30, 2022 | Jan. 31, 2022 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Accounts Receivable, Allowance for Credit Loss | $ 170,868 | $ 184,174 | $ 189,595 | $ 209,020 |
Accounting Standards Update 2022-02 Cumulative Effect, Period of Adoption | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Accounts Receivable, Allowance for Credit Loss | $ 400 | $ 372 |
Customer Accounts Receivable (D
Customer Accounts Receivable (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Apr. 30, 2023 | Apr. 30, 2022 | Jan. 31, 2023 | |
Quantitative information about the receivables portfolio managed [Abstract] | |||
Customer accounts receivable (1) (2) | $ 983,324 | $ 1,025,364 | |
Deferred fees and origination costs, net | (11,211) | (11,699) | |
Allowance for no-interest option credit programs | 17,449 | 18,753 | |
Allowance for uncollectible interest and fees | 17,382 | 20,007 | |
Carrying value of customer accounts receivable | 937,282 | 974,905 | |
Allowance for credit losses | (153,416) | (164,168) | |
Total customer accounts receivable, net | 783,866 | 810,737 | |
Short-term portion of customer accounts receivable, net | (417,359) | (421,683) | |
Long-term customer accounts receivable, net | 366,507 | 389,054 | |
Re-aged customer accounts receivable | 155,100 | 160,900 | |
Financing Receivable, Past Due | 275,900 | 290,400 | |
Interest receivable | 24,600 | 27,500 | |
Interest receivable outstanding net of allowance for uncollectible interest | 7,200 | $ 7,500 | |
Allowance for doubtful accounts and uncollectible interest for customer receivables [Abstract] | |||
Allowance at beginning of period | 184,174 | $ 209,020 | |
Provision | 36,397 | 23,710 | |
Principal charge-offs | (48,926) | (44,092) | |
Interest charge-offs | (10,343) | (10,673) | |
Recoveries | 9,938 | 11,630 | |
Allowance at end of period | 170,868 | 189,595 | |
Average total customer portfolio balance | 1,001,246 | 1,094,745 | |
Accounting Standards Update 2022-02 Cumulative Effect, Period of Adoption | |||
Allowance for doubtful accounts and uncollectible interest for customer receivables [Abstract] | |||
Allowance at beginning of period | 183,802 | ||
Accounting Standards Update 2022-02 Cumulative Effect, Period of Adoption | |||
Allowance for doubtful accounts and uncollectible interest for customer receivables [Abstract] | |||
Allowance at beginning of period | 372 | ||
Allowance at end of period | 400 | ||
Customer Accounts Receivable [Member] | |||
Allowance for doubtful accounts and uncollectible interest for customer receivables [Abstract] | |||
Allowance at beginning of period | 150,579 | 165,044 | |
Provision | 27,522 | 18,298 | |
Principal charge-offs | (39,522) | (31,622) | |
Interest charge-offs | (8,393) | (7,656) | |
Recoveries | 8,064 | 8,341 | |
Allowance at end of period | 138,250 | 152,405 | |
Average total customer portfolio balance | 918,678 | 997,104 | |
Restructured Accounts | |||
Allowance for doubtful accounts and uncollectible interest for customer receivables [Abstract] | |||
Allowance at beginning of period | 33,595 | 43,976 | |
Provision | 8,875 | 5,412 | |
Principal charge-offs | (9,404) | (12,470) | |
Interest charge-offs | (1,950) | (3,017) | |
Recoveries | 1,874 | 3,289 | |
Allowance at end of period | 32,618 | 37,190 | |
Average total customer portfolio balance | 82,568 | $ 97,641 | |
Restructured Accounts | Accounting Standards Update 2022-02 Cumulative Effect, Period of Adoption | |||
Allowance for doubtful accounts and uncollectible interest for customer receivables [Abstract] | |||
Allowance at beginning of period | 33,223 | ||
Restructured Accounts | Accounting Standards Update 2022-02 Cumulative Effect, Period of Adoption | |||
Allowance for doubtful accounts and uncollectible interest for customer receivables [Abstract] | |||
Allowance at beginning of period | $ 372 |
Customer Accounts Receivable -
Customer Accounts Receivable - Schedule of Allowance for Credit Losses (Details) - USD ($) $ in Thousands | Apr. 30, 2023 | Jan. 31, 2023 |
Receivables [Abstract] | ||
Customer accounts receivable - current | $ 507,064 | $ 517,611 |
Allowance for credit losses for customer accounts receivable - current | (89,705) | (95,928) |
Customer accounts receivable, net of allowances | 417,359 | 421,683 |
Customer accounts receivable - non current | 447,740 | 477,301 |
Allowance for credit losses for customer accounts receivable - non current | (81,233) | (88,247) |
Long-term portion of customer accounts receivable, net of allowances | 366,507 | 389,054 |
Total customer accounts receivable, net | $ 783,866 | $ 810,737 |
Customer Accounts Receivable De
Customer Accounts Receivable Delinquency Bucket (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 30, 2023 | Jan. 31, 2023 | |
Financing Receivable, Past Due [Line Items] | ||
2022 | $ 197,646 | |
2021 | 458,406 | |
2020 | 224,786 | |
2019 | 44,763 | |
Prior | 11,681 | |
Carrying value of customer accounts receivable | $ 937,282 | $ 974,905 |
% of Total | 100% | |
2023 | $ 0 | |
2022 | 25,489 | |
2021 | 31,194 | |
2020 | 9,087 | |
Prior | 4,760 | |
Total | 70,530 | |
Current | ||
Financing Receivable, Past Due [Line Items] | ||
2022 | 176,556 | |
2021 | 324,579 | |
2020 | 134,066 | |
2019 | 22,487 | |
Prior | 3,680 | |
Carrying value of customer accounts receivable | $ 661,368 | |
% of Total | 70.60% | |
1-30 | ||
Financing Receivable, Past Due [Line Items] | ||
2022 | $ 15,800 | |
2021 | 63,347 | |
2020 | 39,623 | |
2019 | 9,341 | |
Prior | 2,575 | |
Carrying value of customer accounts receivable | $ 130,686 | |
% of Total | 13.90% | |
31-60 | ||
Financing Receivable, Past Due [Line Items] | ||
2022 | $ 3,722 | |
2021 | 17,060 | |
2020 | 11,950 | |
2019 | 3,066 | |
Prior | 1,151 | |
Carrying value of customer accounts receivable | $ 36,949 | |
% of Total | 3.90% | |
61-90 | ||
Financing Receivable, Past Due [Line Items] | ||
2022 | $ 1,568 | |
2021 | 11,743 | |
2020 | 7,800 | |
2019 | 2,166 | |
Prior | 845 | |
Carrying value of customer accounts receivable | $ 24,122 | |
% of Total | 2.60% | |
91+ | ||
Financing Receivable, Past Due [Line Items] | ||
2022 | $ 0 | |
2021 | 41,677 | |
2020 | 31,347 | |
2019 | 7,703 | |
Prior | 3,430 | |
Carrying value of customer accounts receivable | $ 84,157 | |
% of Total | 9% |
Customer Accounts Receivable _2
Customer Accounts Receivable - Carrying Value (Details) $ in Thousands | Apr. 30, 2023 USD ($) |
Financing Receivable, Modified [Line Items] | |
Carrying Value as of April 30, 2023 | $ 13,247 |
% of Carrying Value of Customer Accounts Receivable | 1.40% |
Significantly re-aged | |
Financing Receivable, Modified [Line Items] | |
Carrying Value as of April 30, 2023 | $ 12,655 |
% of Carrying Value of Customer Accounts Receivable | 1.40% |
Balance forgiveness | |
Financing Receivable, Modified [Line Items] | |
Carrying Value as of April 30, 2023 | $ 165 |
% of Carrying Value of Customer Accounts Receivable | 0% |
Refinance | |
Financing Receivable, Modified [Line Items] | |
Carrying Value as of April 30, 2023 | $ 181 |
% of Carrying Value of Customer Accounts Receivable | 0% |
Combination - significantly re-aged & balance forgiveness | |
Financing Receivable, Modified [Line Items] | |
Carrying Value as of April 30, 2023 | $ 246 |
% of Carrying Value of Customer Accounts Receivable | 0% |
Customer Accounts Receivable _3
Customer Accounts Receivable - Loan Modifications Made to Borrowers Experiencing Financial Difficulty - (Details) $ in Thousands | Apr. 30, 2023 USD ($) |
Financing Receivable, Modified [Line Items] | |
Financing Receivable, Excluding Accrued Interest, Modified, after 12 Months | $ 13,247 |
Current | |
Financing Receivable, Modified [Line Items] | |
Financing Receivable, Excluding Accrued Interest, Modified, after 12 Months | 8,879 |
1-30 | |
Financing Receivable, Modified [Line Items] | |
Financing Receivable, Excluding Accrued Interest, Modified, after 12 Months | 3,196 |
31-60 | |
Financing Receivable, Modified [Line Items] | |
Financing Receivable, Excluding Accrued Interest, Modified, after 12 Months | 960 |
61-90 | |
Financing Receivable, Modified [Line Items] | |
Financing Receivable, Excluding Accrued Interest, Modified, after 12 Months | 67 |
91+ | |
Financing Receivable, Modified [Line Items] | |
Financing Receivable, Excluding Accrued Interest, Modified, after 12 Months | 145 |
Significantly re-aged | |
Financing Receivable, Modified [Line Items] | |
Financing Receivable, Excluding Accrued Interest, Modified, after 12 Months | 12,655 |
Significantly re-aged | Current | |
Financing Receivable, Modified [Line Items] | |
Financing Receivable, Excluding Accrued Interest, Modified, after 12 Months | 8,595 |
Significantly re-aged | 1-30 | |
Financing Receivable, Modified [Line Items] | |
Financing Receivable, Excluding Accrued Interest, Modified, after 12 Months | 3,028 |
Significantly re-aged | 31-60 | |
Financing Receivable, Modified [Line Items] | |
Financing Receivable, Excluding Accrued Interest, Modified, after 12 Months | 908 |
Significantly re-aged | 61-90 | |
Financing Receivable, Modified [Line Items] | |
Financing Receivable, Excluding Accrued Interest, Modified, after 12 Months | 56 |
Significantly re-aged | 91+ | |
Financing Receivable, Modified [Line Items] | |
Financing Receivable, Excluding Accrued Interest, Modified, after 12 Months | 68 |
Balance forgiveness | |
Financing Receivable, Modified [Line Items] | |
Financing Receivable, Excluding Accrued Interest, Modified, after 12 Months | 165 |
Balance forgiveness | Current | |
Financing Receivable, Modified [Line Items] | |
Financing Receivable, Excluding Accrued Interest, Modified, after 12 Months | 36 |
Balance forgiveness | 1-30 | |
Financing Receivable, Modified [Line Items] | |
Financing Receivable, Excluding Accrued Interest, Modified, after 12 Months | 29 |
Balance forgiveness | 31-60 | |
Financing Receivable, Modified [Line Items] | |
Financing Receivable, Excluding Accrued Interest, Modified, after 12 Months | 25 |
Balance forgiveness | 61-90 | |
Financing Receivable, Modified [Line Items] | |
Financing Receivable, Excluding Accrued Interest, Modified, after 12 Months | 4 |
Balance forgiveness | 91+ | |
Financing Receivable, Modified [Line Items] | |
Financing Receivable, Excluding Accrued Interest, Modified, after 12 Months | 71 |
Refinance | |
Financing Receivable, Modified [Line Items] | |
Financing Receivable, Excluding Accrued Interest, Modified, after 12 Months | 181 |
Refinance | Current | |
Financing Receivable, Modified [Line Items] | |
Financing Receivable, Excluding Accrued Interest, Modified, after 12 Months | 107 |
Refinance | 1-30 | |
Financing Receivable, Modified [Line Items] | |
Financing Receivable, Excluding Accrued Interest, Modified, after 12 Months | 58 |
Refinance | 31-60 | |
Financing Receivable, Modified [Line Items] | |
Financing Receivable, Excluding Accrued Interest, Modified, after 12 Months | 9 |
Refinance | 61-90 | |
Financing Receivable, Modified [Line Items] | |
Financing Receivable, Excluding Accrued Interest, Modified, after 12 Months | 7 |
Refinance | 91+ | |
Financing Receivable, Modified [Line Items] | |
Financing Receivable, Excluding Accrued Interest, Modified, after 12 Months | 0 |
Combination - significantly re-aged & balance forgiveness | |
Financing Receivable, Modified [Line Items] | |
Financing Receivable, Excluding Accrued Interest, Modified, after 12 Months | 246 |
Combination - significantly re-aged & balance forgiveness | Current | |
Financing Receivable, Modified [Line Items] | |
Financing Receivable, Excluding Accrued Interest, Modified, after 12 Months | 141 |
Combination - significantly re-aged & balance forgiveness | 1-30 | |
Financing Receivable, Modified [Line Items] | |
Financing Receivable, Excluding Accrued Interest, Modified, after 12 Months | 81 |
Combination - significantly re-aged & balance forgiveness | 31-60 | |
Financing Receivable, Modified [Line Items] | |
Financing Receivable, Excluding Accrued Interest, Modified, after 12 Months | 18 |
Combination - significantly re-aged & balance forgiveness | 61-90 | |
Financing Receivable, Modified [Line Items] | |
Financing Receivable, Excluding Accrued Interest, Modified, after 12 Months | 0 |
Combination - significantly re-aged & balance forgiveness | 91+ | |
Financing Receivable, Modified [Line Items] | |
Financing Receivable, Excluding Accrued Interest, Modified, after 12 Months | $ 6 |
Customer Accounts Receivable _4
Customer Accounts Receivable - Financial Effect of Modifications (Details) $ in Thousands | 3 Months Ended |
Apr. 30, 2023 USD ($) | |
Significantly re-aged | Minimum | |
Financing Receivable, Modified [Line Items] | |
Payment delay duration (in months) | 4 months |
Significantly re-aged | Maximum | |
Financing Receivable, Modified [Line Items] | |
Payment delay duration (in months) | 8 months |
Balance forgiveness | |
Financing Receivable, Modified [Line Items] | |
Balance forgiven (in thousands) | $ 27 |
Refinance | |
Financing Receivable, Modified [Line Items] | |
Balance forgiven (in thousands) | $ 11 |
Weighted-average interest rate reduction | 5.43% |
Term extension duration (in months) | 27 months |
Combination - significantly re-aged & balance forgiveness | |
Financing Receivable, Modified [Line Items] | |
Balance forgiven (in thousands) | $ 26 |
Combination - significantly re-aged & balance forgiveness | Minimum | |
Financing Receivable, Modified [Line Items] | |
Payment delay duration (in months) | 4 months |
Combination - significantly re-aged & balance forgiveness | Maximum | |
Financing Receivable, Modified [Line Items] | |
Payment delay duration (in months) | 8 months |
Customer Accounts Receivable _5
Customer Accounts Receivable - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Apr. 30, 2023 | Jan. 31, 2023 | |
Receivables [Abstract] | ||
Financing Receivable, Allowance for Credit Loss, Writeoff | $ 100 | |
Financing Receivable, Troubled Debt Restructuring, Premodification | $ 76,800 | |
Financing Receivable, Allowance for Credit Loss | $ 400 |
Charges and Credits (Details)
Charges and Credits (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 30, 2023 | Apr. 30, 2022 | |
Charges and Credits [Abstract] | ||
Lease modification | $ (3,147) | $ 0 |
Store closure | 2,340 | 0 |
Charges and credits, net | (807) | $ 0 |
Asset Impairment Charges | 2,300 | |
Gain (Loss) on Sale of Assets and Asset Impairment Charges | $ 3,100 | |
Charges and Credits | 3. Charges and Credits, net Charges and credits consisted of the following: Three Months Ended (in thousands) 2023 2022 Store closure $ 2,340 $ — Asset sale (3,147) — Total charges and credits $ (807) $ — During the three months ended April 30, 2023, we recognized a $3.1 million gain related to the sale of a single store location net of asset disposal costs. Furthermore, we recognized $2.3 million in store closure costs related to the impairment of assets associated with the decision to end the store-within-a-store test with Belk, Inc. |
Finance Charges and Other Rev_3
Finance Charges and Other Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 30, 2023 | Apr. 30, 2022 | |
Troubled Debt Restructuring, Debtor, Subsequent Periods [Line Items] | ||
Interest income and fees | $ 57,189 | $ 62,714 |
Insurance income | 4,440 | 4,572 |
Other revenues | 394 | 271 |
Provisions for uncollectible interest | 8,800 | 9,300 |
Other Income | 62,023 | 67,557 |
Financing Receivable [Member] | ||
Troubled Debt Restructuring, Debtor, Subsequent Periods [Line Items] | ||
Interest income and fees | $ 3,700 | $ 4,100 |
Debt and Financing Lease Obli_3
Debt and Financing Lease Obligations - Schedule of Debt and Capital Lease Obligations (Details) - USD ($) | Feb. 21, 2023 | Apr. 30, 2023 | Jan. 31, 2023 | Mar. 29, 2021 |
Long-term debt [Abstract] | ||||
Long-term Debt | $ 328,334,000 | |||
Financing lease obligations | 4,945,000 | $ 5,226,000 | ||
Total debt and financing lease obligations | 639,279,000 | 657,828,000 | ||
Less: | ||||
Deferred debt issuance costs | (23,033,000) | (20,812,000) | ||
Current maturities of long-term debt and financing lease obligations | (869,000) | (937,000) | ||
Long-term debt and financing lease obligations | 615,377,000 | 636,079,000 | ||
2021-A VIE Class B Notes | ||||
Long-term debt [Abstract] | ||||
Long-term Debt | 26,426,000 | |||
2021-A VIE Class C Notes | ||||
Long-term debt [Abstract] | ||||
Long-term Debt | 57,994,000 | |||
2022-A VIE Class A Notes | ||||
Long-term debt [Abstract] | ||||
Long-term Debt | 48,734,000 | |||
2022-A VIE Class B Notes | ||||
Long-term debt [Abstract] | ||||
Long-term Debt | 132,090,000 | |||
2022-A VIE Class C Notes [Member] | ||||
Long-term debt [Abstract] | ||||
Long-term Debt | 63,090,000 | |||
Secured Debt | ||||
Long-term debt [Abstract] | ||||
Long-term Debt | 328,300,000 | |||
Secured Debt | 2021-A VIE Class B Notes | ||||
Long-term debt [Abstract] | ||||
Long-term Debt | 26,426,000 | 54,597,000 | ||
Secured Debt | 2021-A VIE Class C Notes | ||||
Long-term debt [Abstract] | ||||
Long-term Debt | 57,994,000 | 63,890,000 | ||
Secured Debt | 2022-A VIE Class A Notes | ||||
Long-term debt [Abstract] | ||||
Long-term Debt | 48,734,000 | 117,935,000 | ||
Secured Debt | 2022-A VIE Class B Notes | ||||
Long-term debt [Abstract] | ||||
Long-term Debt | 132,090,000 | 132,090,000 | ||
Secured Debt | 2022-A VIE Class C Notes [Member] | ||||
Long-term debt [Abstract] | ||||
Long-term Debt | 63,090,000 | 63,090,000 | ||
Revolving Credit Facility | ||||
Less: | ||||
Deferred debt issuance costs | (4,800,000) | (5,400,000) | ||
Revolving Credit Facility | Line of Credit | ||||
Long-term debt [Abstract] | ||||
Long-term Debt | 206,000,000 | 221,000,000 | ||
Less: | ||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 650,000,000 | |||
Term Loan | Line of Credit | ||||
Long-term debt [Abstract] | ||||
Long-term Debt | $ 100,000,000 | $ 0 | ||
Less: | ||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 100,000,000 | |||
Line of Credit | Line of Credit | ||||
Less: | ||||
Debt Instrument, Periodic Payment | $ 1,250,000 |
Debt and Financing Lease Obli_4
Debt and Financing Lease Obligations - Senior Notes (Details) $ in Thousands | Apr. 30, 2023 USD ($) |
Debt Instrument [Line Items] | |
Original principal amount | $ 600,760 |
Debt and Financing Lease Obli_5
Debt and Financing Lease Obligations - Asset Backed Notes (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Nov. 30, 2022 | Jul. 21, 2022 | Nov. 23, 2021 | Apr. 30, 2023 | |
Debt Instrument [Line Items] | ||||
Original Principal Amount | $ 600,760 | |||
Original Net Proceeds | 575,603 | |||
Current Principal Amount | 328,334 | |||
2021-A VIE Class B Notes | ||||
Debt Instrument [Line Items] | ||||
Original Principal Amount | 66,090 | |||
Original Net Proceeds | $ 65,635 | |||
Current Principal Amount | $ 26,426 | |||
Contractual Interest Rate | 2.87% | |||
Effective Interest Rate | 3.74% | |||
2021-A VIE Class C Notes | ||||
Debt Instrument [Line Items] | ||||
Original Principal Amount | $ 63,890 | |||
Original Net Proceeds | $ 63,450 | |||
Current Principal Amount | $ 57,994 | |||
Contractual Interest Rate | 4.59% | |||
Effective Interest Rate | 5.16% | |||
2022-A VIE Class A Notes | ||||
Debt Instrument [Line Items] | ||||
Original Principal Amount | $ 275,600 | |||
Original Net Proceeds | $ 273,731 | |||
Current Principal Amount | $ 48,734 | |||
Contractual Interest Rate | 5.87% | |||
Effective Interest Rate | 9.77% | |||
2022-A VIE Class B Notes | ||||
Debt Instrument [Line Items] | ||||
Original Principal Amount | $ 132,090 | |||
Original Net Proceeds | $ 129,050 | |||
Current Principal Amount | $ 132,090 | |||
Contractual Interest Rate | 9.52% | |||
Effective Interest Rate | 10.51% | |||
2022-A VIE Class C Notes [Member] | ||||
Debt Instrument [Line Items] | ||||
Original Principal Amount | $ 63,090 | |||
Original Net Proceeds | $ 43,737 | |||
Current Principal Amount | $ 63,090 | |||
Contractual Interest Rate | 0% | |||
Effective Interest Rate | 19.74% | |||
Asset-backed Securities | ||||
Debt Instrument [Line Items] | ||||
Monthly fee percentage on outstanding balance | 4.75% |
Debt and Financing Lease Obli_6
Debt and Financing Lease Obligations - Revolving Credit Facility (Details) - USD ($) | Feb. 21, 2023 | Nov. 21, 2022 | Apr. 30, 2023 | Mar. 29, 2021 |
Line of Credit Facility [Line Items] | ||||
Original principal amount | $ 600,760,000 | |||
Revolving Credit Facility | Minimum | ||||
Line of Credit Facility [Line Items] | ||||
Line of Credit Facility, Current Borrowing Capacity | $ 40,000,000 | |||
Line of Credit Facility, Current Borrowing Capacity | 40,000,000 | |||
Revolving Credit Facility | Maximum | ||||
Line of Credit Facility [Line Items] | ||||
Line of Credit Facility, Current Borrowing Capacity | 100,000,000 | |||
Line of Credit Facility, Current Borrowing Capacity | 100,000,000 | |||
Line of Credit | Revolving Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Maximum capacity extended under credit facility | $ 650,000,000 | |||
Line of Credit | Revolving Credit Facility | Minimum | ||||
Line of Credit Facility [Line Items] | ||||
Unused capacity fee percentage | 0.25% | |||
Line of Credit | Revolving Credit Facility | Maximum | ||||
Line of Credit Facility [Line Items] | ||||
Unused capacity fee percentage | 0.50% | |||
Line of Credit | Revolving Credit Facility | LIBOR | ||||
Line of Credit Facility [Line Items] | ||||
Variable basis spread | 1% | |||
Debt Instrument, Interest- Free Period | 30 days | |||
Line of Credit | Revolving Credit Facility | LIBOR | Minimum | ||||
Line of Credit Facility [Line Items] | ||||
Variable basis spread | 2.50% | |||
Line of Credit | Revolving Credit Facility | LIBOR | Maximum | ||||
Line of Credit Facility [Line Items] | ||||
Variable basis spread | 3.25% | |||
Line of Credit | Revolving Credit Facility | Alternate Base Rate | Minimum | ||||
Line of Credit Facility [Line Items] | ||||
Variable basis spread | 1.50% | |||
Line of Credit | Revolving Credit Facility | Alternate Base Rate | Maximum | ||||
Line of Credit Facility [Line Items] | ||||
Variable basis spread | 2.25% | |||
Line of Credit | Revolving Credit Facility | Federal Funds Rate | ||||
Line of Credit Facility [Line Items] | ||||
Variable basis spread | 0.50% | |||
Line of Credit | Term Loan | ||||
Line of Credit Facility [Line Items] | ||||
Maximum capacity extended under credit facility | $ 100,000,000 | |||
Line of Credit | Term Loan | Alternate Base Rate | Minimum | ||||
Line of Credit Facility [Line Items] | ||||
Variable basis spread | 4.80% | |||
Line of Credit | Term Loan | Alternate Base Rate | Maximum | ||||
Line of Credit Facility [Line Items] | ||||
Variable basis spread | 7.50% | |||
Revolving Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Available borrowing capacity | 214,000,000 | |||
Sub-facility for letters of credit | 22,200,000 | |||
Additional borrowing capacity | $ 207,700,000 |
Debt and Financing Lease Obli_7
Debt and Financing Lease Obligations - Debt Covenants (Details) $ in Millions | 3 Months Ended |
Apr. 30, 2023 USD ($) | |
Debt Disclosure [Abstract] | |
Debt Instrument, Minimum Interest Coverage Ratio | 1 |
Debt Instrument, Minimum Interest Coverage Ratio, Trailing Two Quarters | 1.50 |
Actual | |
Leverage Ratio must not exceed (maximum) | 1.90 |
ABS Excluded Leverage Ratio must not exceed (maximum) | 1.27 |
Capital Expenditures, net, must not exceed (maximum) | $ 50.7 |
Required Minimum/ Maximum | |
Leverage Ratio must not exceed (maximum) | 4.50 |
ABS Excluded Leverage Ratio must not exceed (maximum) | 2.50 |
Capital Expenditures, net, must not exceed (maximum) | $ 100 |
Variable Interest Entities - Ad
Variable Interest Entities - Additional Information (Details) | 3 Months Ended |
Apr. 30, 2023 | |
Asset-backed Securities | |
Variable Interest Entity [Line Items] | |
Monthly fee percentage on outstanding balance | 4.75% |
Variable Interest Entities (Det
Variable Interest Entities (Details) - USD ($) $ in Thousands | Apr. 30, 2023 | Jan. 31, 2023 | Apr. 30, 2022 | Jan. 31, 2022 |
Assets: | ||||
Restricted cash | $ 32,002 | $ 40,837 | ||
Other accounts receivable | 55,866 | 56,887 | ||
Customer accounts receivable: | ||||
Allowance for uncollectible accounts | (170,868) | (184,174) | $ (189,595) | $ (209,020) |
Allowance for no-interest option credit programs | 17,449 | 18,753 | ||
Deferred fees and origination costs, net | (11,211) | (11,699) | ||
Total customer accounts receivable, net | 783,866 | 810,737 | ||
Assets | 1,676,108 | 1,716,215 | $ 1,727,733 | |
Liabilities: | ||||
Total debt | 328,334 | |||
Long-term debt | 615,377 | 636,079 | ||
Less: deferred debt issuance costs | (23,033) | (20,812) | ||
Total liabilities | 1,206,601 | 1,213,805 | ||
2021-A VIE Class B Notes | ||||
Liabilities: | ||||
Total debt | 26,426 | |||
2021-A VIE Class C Notes | ||||
Liabilities: | ||||
Total debt | 57,994 | |||
2022-A VIE Class A Notes | ||||
Liabilities: | ||||
Total debt | 48,734 | |||
2022-A VIE Class B Notes | ||||
Liabilities: | ||||
Total debt | 132,090 | |||
2022-A VIE Class C Notes [Member] | ||||
Liabilities: | ||||
Total debt | 63,090 | |||
Secured Debt | ||||
Liabilities: | ||||
Total debt | 328,300 | |||
Secured Debt | 2021-A VIE Class B Notes | ||||
Liabilities: | ||||
Total debt | 26,426 | 54,597 | ||
Secured Debt | 2021-A VIE Class C Notes | ||||
Liabilities: | ||||
Total debt | 57,994 | 63,890 | ||
Secured Debt | 2022-A VIE Class A Notes | ||||
Liabilities: | ||||
Total debt | 48,734 | 117,935 | ||
Secured Debt | 2022-A VIE Class B Notes | ||||
Liabilities: | ||||
Total debt | 132,090 | 132,090 | ||
Secured Debt | 2022-A VIE Class C Notes [Member] | ||||
Liabilities: | ||||
Total debt | 63,090 | 63,090 | ||
Variable Interest Entity | ||||
Assets: | ||||
Restricted cash | 29,892 | 38,727 | ||
Customer accounts receivable: | ||||
Customer accounts receivable | 370,423 | 506,811 | ||
Restructured accounts | 54,235 | 46,626 | ||
Allowance for uncollectible accounts | (76,847) | (105,982) | ||
Allowance for no-interest option credit programs | 3,055 | 9,340 | ||
Deferred fees and origination costs, net | (3,291) | (4,851) | ||
Total customer accounts receivable, net | 341,465 | 433,264 | ||
Assets | 373,271 | 471,991 | ||
Liabilities: | ||||
Accrued expenses | 2,738 | 3,475 | ||
Other liabilities | 2,299 | 4,578 | ||
Total debt | 311,917 | 410,790 | ||
Long-term debt | 328,334 | 431,602 | ||
Less: deferred debt issuance costs | (16,417) | (20,812) | ||
Total liabilities | 316,954 | 421,092 | ||
Variable Interest Entity | Related Party | ||||
Assets: | ||||
Other accounts receivable | 1,914 | 0 | ||
Liabilities: | ||||
Due to Conn’s, Inc., net | $ 0 | $ 2,249 |
Segment Information (Details)
Segment Information (Details) $ in Thousands | 3 Months Ended | ||
Apr. 30, 2023 USD ($) state store segment | Apr. 30, 2022 USD ($) | Jan. 31, 2023 USD ($) | |
Segment Reporting Information [Line Items] | |||
Number of operating segments | segment | 2 | ||
Estimated annual rate of reimbursement (as a percent) | 2.50% | ||
Number of states with retail stores | state | 15 | ||
Revenues: | |||
Total net sales | $ 222,547 | $ 272,264 | |
Finance charges and other revenues | 62,023 | 67,557 | |
Total revenues | 284,570 | 339,821 | |
Costs and expenses: | |||
Cost of goods sold | 147,933 | 178,382 | |
Selling, general and administrative expense | 129,238 | 132,783 | |
Provision for bad debts | 28,909 | 14,731 | |
Total costs and expenses | 305,273 | 325,896 | |
Operating (loss) income | (20,703) | 13,925 | |
Interest expense | 16,379 | 5,521 | |
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest | (37,082) | 8,404 | |
Allocation of overhead by operating segments | 8,800 | 9,600 | |
Assets | 1,676,108 | 1,727,733 | $ 1,716,215 |
Charges and credits, net | (807) | 0 | |
Intersegment Eliminations | |||
Revenues: | |||
Total revenues | 6,300 | 6,800 | |
Retail | |||
Revenues: | |||
Total net sales | 223,487 | 272,264 | |
Finance charges and other revenues | 519 | 271 | |
Total revenues | 224,006 | 272,535 | |
Costs and expenses: | |||
Cost of goods sold | 148,561 | 178,382 | |
Selling, general and administrative expense | 95,825 | 96,030 | |
Provision for bad debts | 107 | 179 | |
Total costs and expenses | 243,686 | 274,591 | |
Operating (loss) income | (19,680) | (2,056) | |
Interest expense | 0 | ||
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest | (19,680) | (2,056) | |
Assets | 626,138 | 699,685 | |
Charges and credits, net | (807) | 0 | |
Credit | |||
Revenues: | |||
Total net sales | 0 | ||
Finance charges and other revenues | 61,787 | 67,286 | |
Total revenues | 61,787 | 67,286 | |
Costs and expenses: | |||
Cost of goods sold | 115 | 0 | |
Selling, general and administrative expense | 33,663 | 36,753 | |
Provision for bad debts | 28,802 | 14,552 | |
Total costs and expenses | 62,580 | 51,305 | |
Operating (loss) income | (793) | 15,981 | |
Interest expense | 16,379 | 5,521 | |
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest | (17,172) | 10,460 | |
Assets | 1,049,970 | 1,028,048 | |
Charges and credits, net | 0 | 0 | |
Eliminations | |||
Revenues: | |||
Total net sales | (940) | ||
Finance charges and other revenues | (283) | ||
Total revenues | (1,223) | ||
Costs and expenses: | |||
Cost of goods sold | (743) | ||
Selling, general and administrative expense | (250) | ||
Total costs and expenses | (993) | ||
Operating (loss) income | (230) | ||
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest | (230) | ||
Furniture and Mattress | |||
Revenues: | |||
Total net sales | 76,126 | 88,094 | |
Furniture and Mattress | Retail | |||
Revenues: | |||
Total net sales | 76,368 | 88,094 | |
Furniture and Mattress | Credit | |||
Revenues: | |||
Total net sales | 0 | ||
Furniture and Mattress | Eliminations | |||
Revenues: | |||
Total net sales | (242) | ||
Home Appliance | |||
Revenues: | |||
Total net sales | 81,954 | 109,728 | |
Home Appliance | Retail | |||
Revenues: | |||
Total net sales | 82,266 | 109,728 | |
Home Appliance | Credit | |||
Revenues: | |||
Total net sales | 0 | ||
Home Appliance | Eliminations | |||
Revenues: | |||
Total net sales | (312) | ||
Consumer Electronic | |||
Revenues: | |||
Total net sales | 25,400 | 33,604 | |
Consumer Electronic | Retail | |||
Revenues: | |||
Total net sales | 25,649 | 33,604 | |
Consumer Electronic | Credit | |||
Revenues: | |||
Total net sales | 0 | ||
Consumer Electronic | Eliminations | |||
Revenues: | |||
Total net sales | (249) | ||
Home Office | |||
Revenues: | |||
Total net sales | 7,505 | 10,189 | |
Home Office | Retail | |||
Revenues: | |||
Total net sales | 7,626 | 10,189 | |
Home Office | Credit | |||
Revenues: | |||
Total net sales | 0 | ||
Home Office | Eliminations | |||
Revenues: | |||
Total net sales | (121) | ||
Other | |||
Revenues: | |||
Total net sales | 12,499 | 8,358 | |
Other | Retail | |||
Revenues: | |||
Total net sales | 12,515 | 8,358 | |
Other | Credit | |||
Revenues: | |||
Total net sales | 0 | ||
Other | Eliminations | |||
Revenues: | |||
Total net sales | (16) | ||
Product | |||
Revenues: | |||
Total net sales | 203,484 | 249,973 | |
Product | Retail | |||
Revenues: | |||
Total net sales | 204,424 | 249,973 | |
Product | Credit | |||
Revenues: | |||
Total net sales | 0 | ||
Product | Eliminations | |||
Revenues: | |||
Total net sales | (940) | ||
RSA Commission | |||
Revenues: | |||
Total net sales | 16,905 | 19,836 | |
RSA Commission | Retail | |||
Revenues: | |||
Total net sales | 16,905 | 19,836 | |
RSA Commission | Credit | |||
Revenues: | |||
Total net sales | 0 | ||
Service | |||
Revenues: | |||
Total net sales | 2,158 | 2,455 | |
Service | Retail | |||
Revenues: | |||
Total net sales | $ 2,158 | 2,455 | |
Service | Credit | |||
Revenues: | |||
Total net sales | $ 0 | ||
Outside of US | |||
Segment Reporting Information [Line Items] | |||
Number of stores | store | 0 |
Stockholders_ Equity (Details)
Stockholders’ Equity (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Apr. 30, 2023 | Dec. 15, 2021 | |
Stockholders' Equity Note [Abstract] | ||
Authorized amount (in millions) | $ 150 | |
Stock repurchased (in shares) | 3,316,000 | |
Stock repurchased (in dollars per shares) | $ 20.57 | |
Stock repurchased | $ 68.2 |
Uncategorized Items - conn-2023
Label | Element | Value |
Shares Issued, Value, Share-Based Payment Arrangement, after Forfeiture | us-gaap_StockIssuedDuringPeriodValueShareBasedCompensation | $ (2,027,000) |
APIC, Share-Based Payment Arrangement, Increase for Cost Recognition | us-gaap_AdjustmentsToAdditionalPaidInCapitalSharebasedCompensationRequisiteServicePeriodRecognitionValue | 3,409,000 |
Stock Issued During Period, Value, Employee Stock Purchase Plan | us-gaap_StockIssuedDuringPeriodValueEmployeeStockPurchasePlan | 194,000 |
Additional Paid-in Capital [Member] | ||
Shares Issued, Value, Share-Based Payment Arrangement, after Forfeiture | us-gaap_StockIssuedDuringPeriodValueShareBasedCompensation | (2,029,000) |
APIC, Share-Based Payment Arrangement, Increase for Cost Recognition | us-gaap_AdjustmentsToAdditionalPaidInCapitalSharebasedCompensationRequisiteServicePeriodRecognitionValue | 3,409,000 |
Stock Issued During Period, Value, Employee Stock Purchase Plan | us-gaap_StockIssuedDuringPeriodValueEmployeeStockPurchasePlan | 194,000 |
Equity, Attributable to Parent | us-gaap_StockholdersEquity | 141,993,000 |
Retained Earnings [Member] | ||
Equity, Attributable to Parent | us-gaap_StockholdersEquity | 605,436,000 |
Net Income (Loss) Attributable to Parent | us-gaap_NetIncomeLoss | 6,221,000 |
Common Stock [Member] | ||
Shares Issued, Value, Share-Based Payment Arrangement, after Forfeiture | us-gaap_StockIssuedDuringPeriodValueShareBasedCompensation | 2,000 |
Stock Issued During Period, Value, Employee Stock Purchase Plan | us-gaap_StockIssuedDuringPeriodValueEmployeeStockPurchasePlan | $ 0 |
Shares, Outstanding | us-gaap_SharesOutstanding | 33,192,277 |
Equity, Attributable to Parent | us-gaap_StockholdersEquity | $ 332,000 |
Shares Issued, Shares, Share-Based Payment Arrangement, after Forfeiture | us-gaap_StockIssuedDuringPeriodSharesShareBasedCompensation | 163,032 |
Stock Issued During Period, Shares, Employee Stock Purchase Plans | us-gaap_StockIssuedDuringPeriodSharesEmployeeStockPurchasePlans | 14,192 |