Q1 2022 Conn's Inc Earnings Call
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Good morning, and thank you for holding welcome to the <unk>, Inc Conference call to discuss earnings for the fiscal quarter ended April 30 of 2021. My name is Melissa and I will be your operator today.
During the presentation, all participants will be in a listen only mode. After the speakers' remarks, you'll be invited to participate and the question and answer session.
As a reminder, at this conference is being recorded the company's earnings release dated June 3rd 2021 was distributed before market opened this morning and can be accessed via the company's investor Relations website at IR Dot com and Dot com.
During today's call management will discuss among other financial performance measures adjusted net income and adjusted earnings per diluted share. Please refer to the company's earnings release that was issued today for a reconciliation of these non-GAAP measures to their most comparable GAAP measures.
I must remind you that some of the statements made on this call are forward looking statements within the meaning of the federal Securities laws. These forward looking statements represent the company's present expectations or beliefs concerning future events. The company cautions that such statements are necessarily based on certain assumptions, which are subject to risks and uncertainties.
Which could cause actual results to differ materially from those indicated today.
Your speakers today are norm Miller at the company's CEO and George Bush era, and the company's CFO I would now like to turn the call over to Mr. Miller.
Please go ahead Sir.
Good morning, and welcome to <unk> first quarter fiscal year, 2020.2 earnings conference call.
We generated the highest quarterly net earnings and our 131 year history, which reflects our team's success pursuing our strategic growth initiatives and stronger consumer demand driven by recent government stimulus.
The underlying health of our business is extremely strong with the best same store sales growth and over 7 years and the most profitable credit segment performance that we've ever achieved.
These trends combined to drive record quarterly adjusted earnings of $1.55 per diluted share.
Our strong retail and credit operating performance demonstrates the benefits of last year's prudent actions to derisk and reset our business.
As we emerge from the COVID-19 crisis, we are well positioned to simultaneously grow retail sales, while controlling credit risk.
We have made significant progress achieving this goal during the first quarter.
Compared to the same period last fiscal year first quarter total retail sales increased 26, 5% same store sales increased 19, 4% during the quarter exceeding our expectations and on a 2 year basis, we're up 1.8% as our team capitalized on ROE.
But consumer demand the benefits of recent kind of government stimulus and the continuing execution of our strategic growth initiatives.
We achieved the strong retail sales growth while at the same time, improving credit segment performance customer accounts 60, plus days past due at April 30th 'twenty 'twenty, 1 declined by 49, 4% and re age customer accounts declined by 45.1%.
I believe our strong first quarter retail and credit segment performance is a milestone in our evolution and reflects the meaningful and long term opportunities we have to grow our business.
I am, particularly pleased by the significant increase in first quarter same store sales, which occurred despite a year over year decline and sales financed by our in house credit offering as our underwriting strategy remain conservative and response to the pandemic.
I believe this speaks to the strength of our value proposition and.
And our ability to expand and diversify our customer base as we continue to target of larger addressable market.
Underlying trends throughout our business remain positive. We believe we are well positioned to offset the waning benefits of government stimulus by pursuing opportunities to grow cards in house credit and third party lease to own and sales and benefit from our rapidly expanding ecommerce and omni channel initiatives.
Yes.
Early indications for the second quarter are encouraging and for the month of May same store sales were up approximately 10% driven by robust cons in house credit and third party lease to own sales.
We believe fiscal 2020.2 will be a strong year for cards and we expect annual same store sales to be up high single digits.
So at this overview, let's look at the meaningful progress we are making pursuing our 4 strategic growth initiatives. They consist of leveraging our industry, leading in house and third party credit offerings did.
Digitally transforming our business to better serve our customers expanding our brick and mortar footprint and strengthening our retail capabilities.
The first strategic growth initiative I want to review today is the progress, we're making leveraging our best in class credit offerings.
Our enhanced credit strategy optimizes opportunities between us and our third party partners across the spectrum of Prime near Prime and subprime consumers with a platform of integrated partners. We expect growth of our in house credit offering to come from capturing a greater share of wall.
Net of the higher credit quality customers within our core demographic rather than of proving customers further down the credit spectrum. We believe this strategy will drive additional in house credit sales, while prudently managing credit risk.
I am pleased by the early success of our efforts in the fall of 2020, we began testing underwriting strategies and credit offers to gross sales within our current core demographic segments. Following encouraging initial test results. We began expanding these strategies to more customers and the first quarter.
Of this year.
And April these strategies enabled us to grow our in house credit sales, while maintaining the average origination FICO score at higher post pandemic levels and we have further expanded these strategies to more customers in the second quarter.
We believe these efforts will allow us to recapture a significant portion of the 20% reduction of same store sales, we experienced last fiscal year due to tighter underwriting associated with the COVID-19 crisis, while at the same time controlling overall credit risk and reducing portfolio volatility.
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The confidence we have and our in house credit approach is supported by the lease to own partners, we added last quarter.
Lease to own trends continue to accelerate and lease to own sales increased by $16.7 million or 82% year over year.
We expect momentum and are at least 1 sales to continue throughout the year and support total retail sales growth in fiscal year, 2020.2.
We also continue to experience favorable retail trends from cash and credit card sales initiatives are underway to capture more prime customers and we believe we have of long term and meaningful opportunity to connect with and expanded population of consumers.
Moving on to our digital transformation and E. Commerce growth plans, we continue to accelerate investments and our digital and e-commerce platform to provide consumers with a convenient and flexible and personalized experience across all channels of engagement.
Initiatives include enhancing our direct to consumer platform, expanding our ecommerce team and improving the functionality of our digital capabilities.
I am pleased with the progress we are making and first quarter ecommerce sales were $10.6 million and 96% increase over the same period last fiscal year and over 3 times annual ecommerce sales just 3 years ago.
As we increase our focus on serving our customers where and how they choose to shop. We continue to believe we can double E. Commerce sales again, this fiscal year to over $50 million.
The next component of our strategic growth plan is our significant and long term white space store expansion opportunity during the first quarter, we opened 6 new showrooms, including 5 within the state of Florida growing the total number of showrooms to 152 as of April 30 of 2020.
1 we.
We have increased our new unit expansion plan for the current fiscal year and now expect to opened a total of 11 to 13, new showrooms and.
As the impacts of the COVID-19 crisis subside and we benefit from our enhanced retail and credit programs, we are becoming more confident and our geographic expansion strategies.
Strengthening of our retail capabilities as the final component of our strategic growth initiatives and I'm encouraged by the progress we made during the first quarter.
Overall, I believe our competitive position is improving and our retail strategy is well suited for consumers focus on home related products. In fact, all categories posted positive same store sales during the first quarter, except for home office, which lapped last year's Spike and work.
From home and distance learning product sales.
Throughout fiscal year 'twenty 'twenty, 2 we will continue to refresh and update our categories to drive traffic and appeal to a broader customer base.
This includes of recent revamp of our mattress category, which expanded the assortment of brand name products, we carry including mattress in a box offerings and I'm also excited to announce that we launched dream spot. Our first private label brand, which has quickly become our best selling mattress.
Additionally, we are increasing our product assortment within our appliance category and enhancing our furniture selection to appeal to a broader customer base to drive incremental sales within this higher margin category.
Finally sales of consumer electronics are benefiting from improving TV sales and.
And higher video game hardware sales as inventory, while still constrained has become more available.
The strong retail performance during the quarter allowed us to offset continued challenges associated with the COVID-19, pandemic and industry wide supply chain inventory and pricing dynamics and our team is doing an excellent job working to secure our share of available product as well as working with our.
Anders on opportunistic buys to help bridge the gap until inventories begin to recover.
Like most retailers. We are also experiencing inflationary trends across many of our categories. We are closely monitoring the impacts of inflation and we will continue taking the necessary steps to mitigate its impact on our business and customers.
Overall I am pleased with the progress, we're making across our retail and credit segments. We are successfully creating a seamless omni channel shopping experience centered around our customers, which we believe is allowing us to capture a more diverse and larger addressable market of consumers.
Both within our showrooms and on our website. In addition, we believe having a local presence next day delivery and in house service capabilities further distinguishes us from our competitors.
So to conclude my prepared remarks fiscal year 'twenty 'twenty 2 is off to an outstanding start and we continue to believe we are well positioned to create long term sustainable value for our shareholders.
Finally, our success is only made possible because of the amazing dedication and commitment of our associates on behalf of the entire leadership team. Thank you for your continued hard work and service now.
Now, let me turn the call over to George to review our financial performance.
Thanks, Norm I'm encouraged by the strong start to the year and by the positive momentum underway and our business on a consolidated basis total revenues were $363.7 million for the first quarter, representing a 14, 7% increase from the same period last fiscal year.
We reported GAAP net income of $1.52 per diluted share for the first quarter compared to a loss of $1.95 per diluted share for the same period last fiscal year.
On a non-GAAP basis adjusting for certain charges and credits we reported record net income of $1.55 per diluted share for the first quarter compared to an adjusted loss of $1.89 per diluted share for the same period last fiscal year.
Reconciliations of GAAP to non-GAAP financial measures are available and our first quarter earnings press release that was issued this morning.
Consolidated SG&A expenses for the first quarter were $126 million of $13 million increase from the prior year due to the addition of 13, new showrooms as well as higher variable operating expenses associated with sales growth and the lapping of certain COVID-19 related reductions.
We expect SG&A expense to be up on a 2 year basis, primarily driven by more new stores as we expect tighter cost controls to largely offset continued investments in our growth initiatives.
Looking at our retail segment and more detail total retail revenues for the first quarter were $291.5 million of 26, 4% increase from the same period last fiscal year.
Higher retail revenue was driven by an increase in same store sales of 19, 4% and new store growth, partially offset by lower RSA commissions and retrospective income.
Retail gross margin for the first quarter was 36, 5% and increase of 30 basis points from the same period last fiscal year.
The.
Kris and retail gross margin was due to a larger and more profitable mix of retail sales, partially offset by decline in RSA commissions and retrospective income as a result of lower sales of cars in house financing.
We expect retail gross margin in the current fiscal year to be roughly in line with the prior year.
Retail segment operating income was $15.7 million compared to $5.2 million for the same period last fiscal year due to higher retail sales and higher retail gross margin.
Turning to our credit segment finance charges and other revenues were $72.2 million for the first quarter.
The 16, 6% decline from the same period last fiscal year was a result of a 24, 8% reduction and the average balance of the customer receivable portfolio.
Lower insurance commissions due to the decline and the balance of sale of our in house credit financing.
And a decline and insurance retrospective income.
Partially offsetting the decline and the customer receivable portfolio was record interest income and fee yield of 23, 7% and increase of 240 basis points from the prior fiscal year period.
For the current fiscal year, we expect finance charges and other revenue will be down on a year over year basis, primarily due to a lower balance of customer receivables.
Over the past 12 months the credit quality of our portfolio has improved significantly due in part to the prudent derisking actions, we implemented last year.
As a result, the carrying value of customer accounts receivable of 60 days past due declined 49, 4% year over year to the lowest level in 7 and fiscal years and the carrying value of re aged accounts declined 45, 1% year over year to the lowest level in almost 4 fiscal years.
And.
We remain focused on controlling risk limiting portfolio of volatility and achieving a 1000 basis points of annual credit spread while supporting our long term growth opportunity and I am encouraged by the improving credit trends and strategies underway and our business.
During the first quarter, where we experienced $17.2 million benefit to our provision for bad debts compared to $117.2 million dollar expense last year.
The improvement year over year was due to improved credit quality lower charge offs and the release of a portion of our economic reserve and the first quarter of this year compared to an increase and our economic reserve last year.
We expect provision to be down year over year throughout the current fiscal year, but not at the level. We saw in the first quarter, primarily due to a lower balance of customer receivables improvements and our credit quality at an encouraging economic outlook.
As a reminder, over the long term as our portfolio grows as a result of growth and sales of our in house financing.
And our reserve under CSO will build at a higher rate debt pre seasonal which may result in higher provision for bad debts.
Looking at the decline and our allowance for bad debts during the first quarter and more detail approximately 40% of the decline was driven by a reduction and the size of our portfolio approximately 30% was driven by an improvement in the portfolio performance and the remaining 30% was driven by an improvement and forecasted.
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Our credit spread for the first quarter was 8.4% compared to 6.2% for the same period last year and 7.2% for the fourth quarter of last year.
Credit segment operating income was a record $43.8 million, primarily due to the first quarter provision benefit improvement and credit performance and lower interest expense.
Turning now to our balance sheet and capital position.
We ended the first quarter with an extremely strong balance sheet and capital position as we continued to benefit from significant year over year growth and cash and third party finance sales and robust cash collections on our customer portfolio and fewer originations as a result of our tighter underwriting.
This has produced meaningful operating cash flow over the past 5 quarters, which we have used to reduce debt and strengthen our balance sheet.
During the first quarter, we redeemed the remaining $141.2 million balance of our senior notes that were due in July of 2020, 2 which is further optimized our capital structure enhanced our balance sheet and left us with no near term debt maturities.
We ended the first quarter with $434.7 million and net debt compared to $813 million at the end of the first quarter of last year.
In addition, net debt as a percent of the ending portfolio balance declined to approximately 39% at the end of the first quarter compared to approximately 54% at the end of the first quarter of last year and representing the lowest level in 8 years.
I'm extremely proud of the success, we've had over the past 12 months strengthening our balance sheet derisking of business and repositioning repositioning the company around our 4 strategic growth initiatives.
As norm mentioned in his prepared remarks, we are encouraged by the underlying strength of our business and the strong sales momentum we are experiencing so far this year.
As a result, while demand and macroeconomic uncertainty and the back half of the year remain high. We currently expect same store sales to be up high single digits. This fiscal year as we pursue opportunities across our entire credit waterfall and execute on our 4 key strategic growth initiatives.
Before we opened the call at up to questions I want to share my thanks to all of our team members for their continued hard work service and dedication.
So with this overview norm and I are happy to take your questions. Operator, Please open the call up to questions.
Thank you at this time, we'll be conducting a question and answer session. If you'd like to ask a question. Please press star 1 on your telephone keypad of confirmation tone will indicate your line is and the question Kim you.
You May press star 2 if you'd like to remove your question from the queue from participants using speaker equipment and may be necessary to pick up your handset before pressing the star keys.
Our first question comes from the line of.
Brian Nagel with Oppenheimer and company. Please proceed with your question.
Hi, good morning, good morning.
And Brian first off congratulations on a really strong quarter and nice work and amazing.
So I have a few questions here on.
1 of them, we talked at bidder, nor we talked a bit about the efforts of cards to really cater to a new customer and you mentioned and here again today.
Pull out of this the Covid crisis, no 1 day, and hopefully we get music and economy and society back to some sense of normalcy, how where and how we're to be at what would be efforts of cards look like you know 2 to continue to cater to speak to the those newer customers and the customers that do not use or don't you look to utilize their cards credit.
Yeah. Good question, Brian So.
You know 1 of the things at the pandemic as we've.
We've talked previously about.
It has caused us, but we've realized as the pandemic has unfolded that our value proposition because of our pricing on next day delivery or and how service.
It is a very attractive value proposition proposition for that cash customer that.
At Prime customer in addition to <unk> financing and the lease to own and you saw that and this quarter with our cash and credit card and third party finance sales growing 70% year over year and the quarter and mind you some of that.
We were lapping increased numbers.
On the first quarter of last year as the pandemic under went with that customer so from a merchandising and a marketing standpoint, we continue to stay very focused on the addressable market that we believe is out there across the credit spectrum and what we're excited about is not only do we believe we can continue to capture that customer.
But because of our tighter underwriting here significantly tighter underwriting as you know over the past 12 months and we've just started taking some additional risk here.
At the end of the first quarter and now into the second quarter. We believe we can capture a significant portion of those cant finance customers that we were declining and the past back over the coming year, because our comms business was down 20% plus.
And the.
Throughout the pandemic. So we believe we can capture much of that business back while simultaneously addressing that much larger market with cash and credit card and now with the new lease to own partners. The combination of cons and lease to own and the lower end of at the mid to lower end of the credit spectrum and.
In conjunction with.
That's a larger addressable market at the higher end, we believe positions us extremely well here not only for the balance of this year, but going forward into the future.
And that's really helpful.
Hum.
As a follow up and it was just on I guess this is more focused on the credit side. So just so I understand so you've started to take like you said take more risk on.
Is there of weight of benchmarks out there so you're you're your risk tolerance sort of say is now where it was and where was it at and how much further you'd have to go and then the follow on to that of happy because I hear what you're saying that you know the.
The credit operation and that was even stronger and I'm sure.
And you're taking on more risk, but you're able to manage at risk even better so and how it recognizing you haven't given and I think long term guidance on this but how should we think about some of the key credit metrics. We watch with no 60 day delinquencies or something else how should those track even as you take more risk on.
Yeah, Good question and again, Brian So.
What's really exciting as we're taking more risk here is that we're taking risk with higher credit quality customers.
And then we have and the past and the reason that we're able with the reason we're doing that are able to do that is we don't have to go as far down the credit spectrum, Wisconsin financing because of our at least on the to lease to own partners that we've added.
Letting them picks at lower credit quality and customer up at in the past when we've taken more at risk we've gone deeper in the credit spectrum now, we're just going broader at a at a higher credit quality and you can see that with our FICO scores prior to the pandemic caused the if you looked at the FICO score.
And for Con financing it was running about 6 of 7.6 O 8 on an average and our FICO scores during the pandemic with the tightened underwriting ran about 617.618, and now that we started to take what I say more risk broader at at what that higher credit quality.
And that FICO scores are not dipping down we're staying at those higher FICO scores and the reason that we can do that is because of the lease to own partners, we're actually taking less risk lower on because the lease to own partners are capturing that and at a much higher degree than they ever had and our history and.
That's why our at least 1 business, which was up 38% in the fourth quarter is up 80%.
And it's accelerated here in the first quarter. So we can you know.
I hate to use it but we can have on our cake and eat at 2 we can and get the higher credit quality on the con side, but also cannot lose those customers on the lower credit quality side because of our lease to own partnerships have strengthened and so much with the addition of the 2 partners as far as credit delinquencies of the portfolio.
<unk> clearly has never been in the condition that it's been and at.
And as it sits at today and anytime and my 6 years here and and arguably are as good as anytime and the company's history and and the metrics that I would stay focused on I would encourage investors to stay focused on is if you look at 60 day delinquencies are down materially.
And if you look at re aged accounts, they're down lower materially TD are troubled debt restructuring accounts are down materially charge offs are moving down significantly as well so.
If you look at those metrics going forward our expectation is.
We can maintain a very.
Very strong credit portfolio simultaneously, while growing the business through comps financing through at least the 1 partnership as well as at the higher end of the credit spectrum as well.
Hey, Brian This is George I would just add to that that sometimes when we think about taking more risk. It means higher losses that is not what we're talking about here and what we're referring to a dynamic where we're growing the sale of our cards and house financing without actually taking higher losses, because we're going deeper on the on the.
We're capturing more of the share of wallet of the higher credit quality customer rather than going further down the credit spectrum.
Got it well, thank you and again congratulations.
Thanks, Brian.
Thank you. Our next question comes from the line of Rick Nelson with Stephens, Inc. Please proceed with your question.
Thanks.
Good morning, Mike and congrats on a great and start to the year.
Alright.
To follow up on Europe.
Yeah.
Or new strategies, you're taking on.
And more risk with the end.
House on credit, but I'm curious how much of it from a same store sales driver are those new customers.
And how that's impacting you.
Some of the credit expense first payment default.
For example.
Yes. So if you look at the first quarter results you saw that our comps finance sales were still down year over year of 2% with the same store sales performance that we had I will tell you April we saw kind of financing for just the month of April it was that they were actually positive sales year over year.
So we started to see benefit as we were taking again, when we say more risk it's not further down the credit spectrum, Rick which is what we've historically done and the past it's about capturing more of the wallet with the higher credit colleague and we're actually taking less risk than we probably ever have from Con finance.
And lowered down the credit spectrum because of the strength of the at least on partners, we're letting them capture of that business because of their profitability model at <unk>.
Which enables us to go broader at the higher end of the spectrum as far as from a initial delinquency and F. P D.
Ari pleased with what we're seeing and as I mentioned with the on the prior call with Brian. If you look at our FICO scores and we don't underwrite specifically to FICO, obviously, we have our own proprietary underwriting models, but FICO is an indicator of overall portfolio credit quality on your.
Seeing that we're maintaining.
And all of record high for at for costs financing.
FICO score originations at similar levels as we saw during the pandemic, which is when we've seen this extremely strong performance from our credit portfolio. So our expectation is we can capture we can continue to capture incremental costs, finding and sales here going through.
The second quarter and on the balance of the year and do that while maintaining credit risk and at an acceptable level.
I mean.
And norm and.
How sort of credit was 49 purchase kind of of sales.
And this quarter.
Thoughts on where you are.
At that going a work from home strategy.
Yeah. Good question at because you.
You know what I will tell you is we're focused internally at.
And as you know his store, we're not focused as much on the balance of sale, where we're letting that fall wherever it falls at what I would say is and now pre pandemic our costs financing was north of 70% I don't expect it to be debt.
And to ever get back to those levels, primarily because you know we don't want to grow costs financing at the expense of taking sales from lease to own or 1 of the other.
Segments on the credit.
Spectrum, but we want to do is our expectation as we believe we can materially grow lease to own we can grow costs financing, we can grow our higher credit quality as well as cash and continue to have cash and credit card deliver at a high.
Balance of sales level over double though of what it has been historically.
And and so but at the end of the day I mean, that's a long answer to your question I would expect costs financing to be somewhere between 50, and 60% on a consistent basis going forward, but again, we're not we're not targeting a specific b O S and L. T O with our lease to own or any of the <unk>.
Credit spectrum, our mindset is we're agnostic from a credit standpoint, we want it we believe we can grow all 4 segments and whatever works for our customer is what we want and be able to provide them and debt and many of our customers' cases, they have multiple options. They may have a synchrony option of cons.
The option of at least 1.
And we want to be able to provide them whatever option works best for them be at in the store or online.
Uh huh.
And so.
And Oh.
To follow up on no interest receivables and stuff.
And pretty Signup for debt.
Yeah.
Italy and year over year is that part of that and strategy to attract these higher quality customers.
Yes. It is.
Combination of both seeing of higher credit quality customer come through our door and asked deliberately targeting of greater share of that customer's wallet.
Okay.
Thanks, a lot.
Thanks, Rick.
Thank you. Our next question comes from the line of Brad Thomas with Keybanc Capital markets. Please proceed with your question.
Okay.
Hey, good morning, and let me add my congratulations as well on the quarter and momentum of the business.
I wanted to continue from the line of questioning around how to think about the credit segment.
Going forward, both financially and strategically how you're thinking about it.
And when I look at the you know.
P&L for the credit segment, obviously, you had debt.
At a provision that was at a good guy here this quarter of 48, but I think even if you adjust for that we've now had 3 of the last 4 quarters and where you've had pretax income positive for the kind of segment, which is really.
And quite quite a feat normally and its been you know a money losing business for you and to support the retail business and the overall company.
I guess I'd be curious your thoughts on what the level of profitability you all might try to optimize around and what might be sustainable going forward as we think about the credit segment.
That's a good question.
So what I will say is we're still very focused on 1000 basis points of spread and we're focused on on.
And not necessarily driving profitability out of the credit if we if we can capture of more retail sales on the financing side and we're gonna do that prudently and and as you heard me and.
And both are.
And both of our comments as well as and some of my answers to the questions here that you know what.
We're really as we're taking risk here, we're doing it and AR and at very different fashion and we have historically certainly in the 6 years that I've been here with the company and that we're not going deeper and the credit spectrum, because what we what we don't want is we believe we don't want and issue in the future where.
Because of risk, we're taking that it comes back to bite us from a credit standpoint down the road. So our intention is to make sure to push that credit risk on those lower credit quality customers to the lease to own partners and for us with our costs financing to.
To go with a greater share of to capture a greater share of wallet with the higher credit quality customer.
Now when that happens you know.
We're not going on.
And that will that will create opportunities potentially for the credit business to make money and be profitable because you're right. Even if you adjust for the macro adjustment from an allowance change because of the performance of the portfolio.
And the strength of the portfolio at created.
A nice tailwind from a profitability. So the bottom line is what I would say is that there is opportunity for us to make money and the credit business going forward I won't say that that is as you know I.
I wouldn't I wouldn't take that if we have opportunity to grow the retail business and do that and of smart manner from of costs financing standpoint, but if we do not and we will certainly takes of profitability from a credit side of it from the credit side of the house.
And it it's great and of course.
All of housekeeping items here on the quarter and also a little bit longer term in nature.
At least on rent to own came in over 12 percentage sales I think historically you had targeted adding it to over 10% and how are you thinking about the opportunity and what the targets are going forward here.
We're really trying to move away from bread any balance of sales target I know I had 10% out there for several years debt.
And we work to achieve we're we're more focused on that dollar increase because we don't want to capture at least on balance of sale because we're taking it from comps financing or another part of the business. So what we're more focused on as a team and and as a business is how do we grow and raw dollar.
Materially or at least the 1 business or cons financing from a dollar standpoint are high credit quality as well as our cash and credit card customers. So.
Now you're right our balance of sale was 12%, but it could actually go down if comps financing grows faster than lease to own but what are but our dollars can actually could actually go up and that's what the expectation is we want the dollars and each of the category to grow up because we put.
And the bank dollars, we don't put a balance of sale does that makes sense.
Absolutely it makes perfect sense.
And then just the last 1 from me, we obviously was a unique quarter with all of the stimulus dollars that were out there is there any way to quantify what kind of an impact of it it had on on the retail and credit side of the business I know, its probably and impossible to know for sure but yeah.
Estimates for the impact.
No. It's a good question and clearly has had an impact on both the credit side with our cash collections.
As well as on the on the retail sales side of the house.
It's very very difficult for us to to quantify not that we haven't looked at at a variety of different ways, but what.
What I would say is it certainly has had a positive impact but what we're excited about is even as the stimulus starts to wane and some of the unemployment goes away with the opportunity and cons financing and and we believe we have an inherent within the business.
And we're very bullish about what the balance of this year and going forward, what the business model portends for us to be able to capture even beyond this fiscal year.
That's great. Thanks, so much.
Thank you ladies and gentlemen, this concludes our question and answer session I'll turn the floor back to Mr. Miller for any final comments.
First of all I want to thank again Echo my comments and Georgia is on the call to thank our.
<unk> 4500 associates across the company for their hard work throughout the pandemic as our stores stayed open end and they weathered through it we wouldn't we wouldn't have had the quarter and the year that we've had without their hard work. So thank you to them. We also appreciate everybody's interest and the business and we look forward to sharing our second quarter results were.
He and a few months have a great day everyone.
Thank you. This concludes today's conference you may disconnect. Your lines at this time. Thank you for your participation.