Conn's CEO Holt Out, Miller Back in as Interim CEO in Shakeup

Chandra Holt stepped down as CEO of Conn’s and resigned from the board, effective immediately, the company announced Tuesday. Former CEO and current board member Norman Miller will be interim CEO, it said. Shares hit a 52-week low Tuesday at $6.22before closing 14.8% down at $6.91.

Conn’s “remains challenged by macroeconomic headwinds, which is impacting consumer spending and disproportionately affecting year-over-year sales to the Company’s financial access customer segment and sales of discretionary product categories,” said Bob Martin, lead independent director, on behalf of the board.

The company also withdrew full-year fiscal 2023 revenue guidance it gave on its August Q2 earnings call for FY ’23 ending Jan. 31, citing the leadership change and “continued macroeconomic and retail uncertainty.” At that time, Conn’s cut guidance to a low-to mid-teens decline, from previous guidance of a high single-digit decline (see 2208310056). Conn's' Q2 revenue dropped 17.1% year on year on a 19.4% drop in net sales and a 6.3% reduction in finance charges and other revenue. Same-store sales fell 22%.

In the Tuesday update, Conn's said it now expects revenue for fiscal Q3 ending Oct. 31 to be down 21%-23% year on year, with operating margin in the negative mid-single digits. The company plans to give a full-year revenue update when it reports Q3 FY ’23 results in December.

The board is “pleased to welcome Norm back” as interim president and CEO, said Martin, saying Miller “stabilized the Company’s retail and credit operations, grew its store footprint, and guided the Company profitably through several unprecedented challenges including the global pandemic in 2020 and 2021.” Miller produced "several record setting years of profitable growth, while serving as President and Chief Operating Officer,” Martin said. Miller was Conn’s CEO September 2015-August 2021 and executive chairman from August 2021 until April. His LinkedIn profile shows him as a board member since July.

Under Miller’s previous tenure as CEO, Conn’s operating margins grew from 7% to 12%, helping to drive a 40% boost in the company’s book value, Martin said. Annual credit segment income before taxes improved from negative $100 million to a positive $65 million, and e-commerce sales grew from less than 1% of total retail sales to over 5% of retail sales during his previous tenure, Martin said. Conn's operates more than 160 stores in 15 states with over 3,500 employees.