RPM International Inc. (RPM), ConAgra Foods, Inc. (CAG): Three Earnings Reports That Caught My Attention Last Week

Conn’s
Big-box retailer Best Buy Co., Inc. (NYSE:BBY) had a phenomenal quarter, reviving its share price from certain doom after announcing a price-matching policy that should put an end to most showrooming and put it on a more competitive level with regard to smartphone and tablet marketing. CONN’S, Inc. (NASDAQ:CONN), on the other hand, has left Best Buy in the dust despite also being heavily reliant on consumer electronics in the past. Its path to success, though, has been considerably different.

Conn’s fourth-quarter EPS actually fell $0.02 shy of estimates and, following the amazing run it’s had, would normally have sacked the stock. However, CONN’S, Inc. (NASDAQ:CONN) raised guidance for fiscal 2014 changed all that and sent the stock shooting higher. Conn’s attributes its outperformance to a remodel/refocus of some of its stores to HomePlus locations, and to the boost in sales in furniture and mattresses. Product margins on furniture sales and mattresses rose 11.1% to 46.7% alone during the quarter, while consumer electronics sales dipped 3% over the year-ago period.

And still, I balk at the concept that Conn’s has turned the corner. Mattress-only firms Tempur-Pedic and Mattress Firm have struggled mightily, so I don’t foresee mattress sales at Conn’s outperforming these peers for much longer. In addition, low housing inventory, higher payroll taxes, and delayed tax refunds could ravage its furniture sales in the coming quarter. Tack that onto already weak electronic sales — and a resurgent Best Buy Co., Inc. (NYSE:BBY) — and you have a recipe for concern.

Foolish roundup
Sometimes an earnings beat or miss isn’t as cut-and-dried as it appears. I’ve given my two cents on what’s next for each of these companies — now it’s your turn to sound off. Share your thoughts in the comments section below and consider adding these stocks to your free and personalized watchlist.

The article 3 Earnings Reports That Caught My Attention Last Week originally appeared on Fool.com and is written by Sean Williams.

Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.The Motley Fool owns shares of Tempur-Pedic International. The Motley Fool recommends Procter & Gamble.

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