Conn’s Inc., a Texas-based seller of electronics and appliances, suffered its worst one-day stock decline in more than a decade after the company cut its forecast and Oppenheimer & Co. downgraded the shares.
The company predicted earnings of $3.40 to $3.70 a share this year, down from a previous forecast of as much as $4, according to a statement today. Conn’s blamed sluggish sales of electronics and higher delinquency rates, which measure the percentage of loans that aren’t being repaid.
Conn’s shares fell as much as 37 percent to $35.10 in New York, the biggest one-day drop since its initial public offering in 2003. Before the plunge, the stock had been up 75 percent in the past year. Oppenheimer cut its rating on the stock to market perform, the equivalent of a hold, from outperform. The firm has a 12-month price target of $44 on the stock.
Electronics chains are facing increasing competition from online retailers, hurting prices and foot traffic. Best Buy Co. announced plans to cut 950 jobs in Canada last month after posting a decline in holiday sales. Its revenue has shrunk in five of the past six quarters.
Conn’s, founded more than 120 years ago as a plumbing company, now sells everything from computers to mattresses. The chain has locations in Arizona, Louisiana, New Mexico, Oklahoma and Texas. It also offers credit to shoppers under its Conn’s Yes Money program.