Good morning, and thank you for holding. Welcome to the Conn's, Inc. conference call to discuss earnings for the Fiscal Quarter Ended October 31, 2021. My name is Melissa, and I will be operator for today. During the presentation, all participants will be in a listen-only mode. After the speakers’ remarks, you will be invited to participate in a question and answer session. As a reminder, this conference call is being recorded. The company's earnings release dated December 7, 2021 was distributed before market opened this morning, and may be accessed via the company's Investor Relations website at ir.conns.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 in 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 Chandra Holt, the Company's CEO; and George Bchara, the Company's CFO. At this time, I would like to turn the call over to Ms. Holt. Please go ahead.

Good morning, and welcome to Conn's Third Quarter Fiscal Year 2022 Earnings Conference Call. I'll start today's call with a review of the quarter and outlook for the remainder of our fiscal year before turning the call over to George who will review our financial results. Since joining the company as CEO in August, my confidence in our differentiated business model has only increased. We had a great third quarter, which reinforces my excitement in the direction Conn’s headed and my belief in the enormous potential of our expanding retail, digital, and payment offerings. Overall, I am proud of our impressive third quarter performance, especially in this very fluid business environment. During the third quarter, earnings per share increased 140% over the prior year to $0.60 per diluted share driven by accelerating retail sales momentum, triple-digit year-over-year e-commerce growth, and favorable credit performance. On a year-to-date basis, total retail sales have increased 26.3% to $972.7 million and earnings have increased to $3.34 per diluted share. Our strong financial results are a testament to the hard work and commitment of our team members and the actions we are pursuing to create sustainable value for our shareholders. The third quarter same-store sales exceeded our expectations increasing 20.6% over the prior fiscal year and total sales were up 28.8%. On a two-year basis, same-store sales continued to accelerate in the third quarter increasing 9.7%, compared to 3.2% in the second quarter and 1.8% in the first quarter. Retail growth underway demonstrates the rapid expansion of our e-commerce business, increasing demand across our major product categories and our success attracting a wider range of customers. In fact, retail sales grew across all payment options even as we lapped the significant growth we experienced last fiscal year in non-Conn’s finance sales. We are also benefiting from the assortment and supply chain decisions we made earlier this year to maintain a high level of in-stock to support next day delivery. At October 31, 2021, over 80% of the items we carried were available for next day delivery even as sales increased at a faster pace than inventory. We believe our in-stock position and next day availability was a competitive differentiator in the third quarter and enabled us to attract new customers. While global supply chain challenges are expected to continue into the New Year, this year’s results demonstrate that our teams are successfully managing through these issue. We believe our proactive inventory strategies will continue benefitting our business and competitive position going forward. As expected, third quarter retail gross margins were pressured by higher international freight costs that elevated cost of goods sold. Our team continues to do a great job managing this fluid environment and optimizing our domestic distribution assets. Our nimble supply chain approach has also allowed us to reduce dependency on quad-core (ph). We are also taking actions to support our margins by diversifying our sourcing base, flexing our assortments, reducing promotions, and selectively increasing prices. While we remain focused on providing customers with compelling values, we will continue to closely monitor market conditions and margins across our categories and expect to continue to prudently pass along price increases to mitigate higher costs. Looking at our third quarter retail sales and performance in more detail, we saw double-digit sales growth across our top product categories. Within our appliance category, sales remained strong as same-store sales increased 21.9% over the prior year. Sales growth was driven by our assortment expansion, favorable in-stock position, and rapid e-commerce growth. Furniture and mattress same-store sales increased 18.8% over the prior year. More than any other category, we have pivoted the furniture assortment through a creative sourcing action to maintain a consistent flow of products and ensure a broad range of next day delivery options for our customers. In our mattress category, we continued to see strong growth from our reinvented assortment launched earlier this year composed of leading national brands and our first private-label brand, Dreamspot. Dreamspot continues to exceed our expectations and is our number one selling mattress brand in both units and dollars. In addition, our expanded mattress in a box assortment is driving our online growth in the category. The same-store sales within our consumer electronics category increased 28.2% over the prior year. This success was driven primarily by higher TV unit sales, as we leaned into the growth segment of premium picture quality and ultra large screen sizes. In addition, as a heavily penetrated category online, TVs are benefiting from our rapid e-commerce growth. Lastly, Black Friday TV pricing started on October and contributed to a strong end to the third quarter. From a channel perspective, we ended the quarter with a record $19.2 million of e-commerce sales with 294.8% year-over-year increase in e-commerce sales as a result of the investments we have been making to improve the functionality of our website and create a frictionless customer experience online, while also leveraging our best-in-class next day, white glove delivery capabilities. We believe our long-term e-commerce growth opportunity is significant and we continue to invest heavily in our digital experience to increased customer conversion. With year-to-date e-commerce sales of $47.2 million, we believe we are on track to grow e-commerce sales to approximately $70 million this fiscal year. We are in the early innings of our digital transformation and I believe we can significantly increase our e-commerce penetration in the coming years to be in line with other comparable omni-channel retailers. The performance of new stores is also contributing to our growth. Recently opened new stores added 8.2% to total retail sales growth for the quarter. We ended the third quarter with 157 stores and we have opened 11 locations year-to-date primarily within the State of Florida. The performance of recently opened stores is encouraging and we anticipate accelerating our pace of store openings next fiscal year. Turning to our credit segment, weWe entered the third quarter with favorable underlying credit trends reflecting the successful actions we took beginning in March of 2020 to carefully manage risk throughout the COVID-19 pandemic. As a result of these prudent actions, we achieved a third quarter credit spread of 14.6% representing the highest spread in over 10 years. As shown on Slide 12 of our investor presentation, since optimizing our credit strategy, higher credit quality customers represent a greater percentage of Conn’s in-house finance sales. This has occurred even as these in-house finance sales have increased. In addition, these new higher credit quality vintages are outperforming older vintages. The weighted average origination credit score of sales finance has averaged 616 over the past four quarters compared to 608 for the fiscal year ended January 31, 2020. Our disciplined approach to risk has helped proactively manage our 60 plus day delinquency and re-aged balances. Both indicators of portfolio health remain well below pre-COVID levels. As a percent of the portfolio, the 60 plus day past due balance was 8.8%, compared to 11.5% for the same period last fiscal year. The balance of re-aged accounts as a percent of the portfolio was 18.3% compared to 28.2% for the same period last fiscal year. While we expect delinquency and charge-off trends to normalize in the coming quarters, we believe they will remain below pre-COVID levels based on our enhanced credit strategy and current economic outlook. As a result, I believe we are well positioned to target a credit spread of approximately 1000 basis points going forward. As you can see, Conn’s has emerged from the COVID-19 pandemic stronger and better positioned for sustainable growth. Our confidence in our credit segment reflects the transformation we made during the pandemic to refine our credit strategy and new lease-to-own partners. In addition, our expanded focus across a larger total addressable market of prime, new prime and sub-prime customers is driving continued retail growth through all payment options. This is especially encouraging as we have lacked significant growth in cash, credit card and third-party finance sales from the prior fiscal years. In fact, cash, credit card and third-party finance sales have increased 23.9% during the third quarter after increasing 32.7% in the third quarter last fiscal year. Overall, I believe Conn’s is uniquely positioned to navigate the current macro environment and deliver strong retail and credit results next fiscal year. We are entering the fourth quarter with a best credit performance in our recent history reflected by the highest credit spread in over ten years, as well as favorable 60 plus day delinquency and re-age trends. In addition, our enhanced credit strategy, which relies more heavily on our third-party partners allows us to capture incremental customers regardless of where they fall in the credit spectrum. To conclude my prepared remarks, we are well positioned heading into the fourth quarter because of our stable credit segment and growing retail business. Overall retail trends remains strong reflecting favorable consumer demand and the growth strategies we have put in place. In addition, providing flexible and affordable payment options is an important component of our value proposition. We believe this creates a unique competitive advantage that helps our customers better navigate the current inflationary period. I believe our recent results demonstrate the powerful value proposition we have created and a strong position we are and to navigate the dynamic retail and credit environment. Our impressive third quarter and year-to-date performance, robust in-stock inventory levels and growing e-commerce capabilities are encouraging and we are on track to deliver significant revenue growth and record earnings this fiscal year. As we remain focused on the future, I am confident we are headed in the right direction. I look forward to updating investors on our enhanced strategic growth plan and long-term financial outlook at an in-person Investor Day in Houston early next year. More details will be announced in the coming weeks and I look forward to sharing our exciting strategies aimed at creating significant value for our shareholders. Finally, I want to use this opportunity to thank our team members for your steadfast commitment to Conn’s. Thank you for your continued support and service. Now, let me turn the call over to George to review our financial performance.

Thanks, Chandra. I am encouraged by the positive momentum underway in our business and our strong position headed into the fourth quarter. On a consolidated basis, total revenues were $405.5 million for the third quarter, representing a 21.4% increase from the same period last fiscal year. We reported strong third quarter net income of $0.60 per diluted share, compared to net income of $0.25 per diluted share for the same period last fiscal year. Looking at our retail segment in more detail, total retail revenues for the third quarter were $334.8 million, a 28.8% increase from the same period last fiscal year. Higher retail revenue was driven by an increase in same-store sales of 20.6% and new store growth. During the third quarter, Conn's credit sales increased 31%, which we achieved by capturing a greater share of wallet and a larger amount of higher credit quality consumers within our core demographic rather than by approving applicants further down the credit spectrum. Cash, credit card, and third-party finance sales grew 23.9% during the third quarter of fiscal year 2022. This increase was driven by a 64% increase in lease-to-own sales as we successfully leveraged our platform of integrated partners. We continue to believe we have opportunities to increase sales across all our financing options. Retail gross margin for the third quarter was 36.8%, a decrease of 150 basis points from the same period last fiscal year. The year-over-year decrease in retail gross margin was primarily driven by the impact of increased product cost as a result of higher freight, partially offset by an increase in sales of higher margin products. Higher retail sales helped leverage retail SG&A expense during the quarter. As a percent of retail sales, SG&A expenses were 30.2% for the third quarter compared to 32.4% for the same period last fiscal year. Retail segment operating income was $22.5 million compared to $15.2 million for the same period last fiscal year due to higher retail sales and improved operating leverage, partially offset by lower retail gross margin. Turning to our credit segment, finance charges and other revenues were $70.6 million for the third quarter. The 4.9% decline from the same period last fiscal year was primarily a result of a 15.2% reduction in the average balance of the customer receivable portfolio. The credit quality of our portfolio has improved significantly due in part to the prudent de-risking actions we began implementing in March 2020. Our strong credit results continue to show that our receivables portfolio is performing well. Annualized net charge-offs as a percent of the average portfolio balance was 8% at the end of the third quarter, compared to 14.7% for the same period last year. During the third quarter, the credit provision for bad debts was $26.5 million, compared to $27.4 million last fiscal year. The year-over-year decline was due to an improvement in credit quality, which resulted in lower charge-offs during the quarter, partially offset by a greater increase in the allowance. Credit segment income before taxes was $1.8 million, compared to a $2.7 million loss for the same period last fiscal year, primarily due to lower interest expense, a lower provision for bad debt, and improvements in our credit performance. I am pleased to report that this is the fourth consecutive quarter of profitable credit segment income before taxes. As our portfolio begins to grow, we will continue to focus on controlling risk, limiting portfolio volatility and achieving approximately a 1,000 basis points of annual credit spread, while supporting our long-term growth opportunity. Consolidated SG&A expenses for the third quarter were $138.1 million. The $15.9 million increase from the prior period was due to higher variable operating expenses associated with sales growth, additional new stores and an increase in advertising cost as we lapse prior year reductions due to the COVID-19 pandemic. Turning now to our balance sheet and capital position. We ended the third quarter with a strong balance sheet and capital position as we continue to benefit from significant year-over-year growth in cash and third-party finance sales and robust cash collections on our customer receivables portfolio. This has produced meaningful operating cash flow over the past seven quarters, which we have used to further reduce debt and strengthen our balance sheet. We ended the third quarter with $424.1 million in net debt, compared to $615.2 million at the end of the third quarter of last year. In addition, net debt as a percent of the ending portfolio balance declined to approximately 37.7% at the end of the third quarter, compared to approximately 48.2% at the end of the third quarter of last year. In November, we closed our tenth ABS transaction since reentering the ABS market in 2015. The terms of the 2021 A transaction reflects the highest advance rate of 85.75% and lowest all-in cost of funds of approximately 3.9% since we reentered the ABS market. We believe completing this transaction, which resulted in net proceeds of $377.8 million, further strengthens our liquidity position well into next fiscal year. In addition, our proven ABS platform continues to demonstrate our ability to access the capital markets. I am pleased with our success, strengthening the balance sheet, de-risking the business and executing our growth initiatives. These efforts have built underlying strength in our business and driven the strong sales momentum we have experienced so far this year. Before we open the call up to questions, I want to review our expectations for the full year and fourth quarter and provide some initial thoughts on our business as we head into next fiscal year. Starting with retail sales, early Black Friday pricing, combined with concerns related to product availability causing earlier start to the holiday season, which we believe pulled forward some retail sales into the third quarter. We believe our marketing and promotions were well positioned to capitalize on these trends and we continue to expect mid-teens same-store sales growth for the full year. For the current fiscal year, we expect finance charges and other revenues to be down year-over-year, primarily due to a lower balance of customer receivables. Given the ongoing issues related to the global supply chain, we now expect full year retail gross margin to be down approximately 30 to 50 basis points resulting in retail gross margin being down approximately 100 to 150 basis points in the fourth quarter. We continue to believe SG&A expenses will be up on a two year basis primarily driven by new stores, as we anticipate continued investments in our growth strategies to be largely offset by tighter cost controls. The fourth quarter provision is expected to be up versus the prior year period, driven primarily by portfolio growth. In addition, the provision in the fourth quarter of last fiscal year benefited from an approximately $20 million reduction in our allowance, primarily driven by improved economic conditions, as well as a reduction in the balance of accounts that received a COVID-19 deferral. As we look into next year, we expect to produce positive same-store sales, despite a fluid economic environment. We also anticipate accelerating our pace of new store openings in fiscal year 2023, above the 12 stores we will open this fiscal year. Retail gross margins are expected to remain under pressure next year, driven primarily by the ongoing impacts of the global supply chain. We anticipate our provision next year to increase, primarily due to portfolio growth from higher sales of Conn’s in-house financing and a smaller reduction in the economic reserve within our allowance. We plan to provide more insight into next year’s expectations, as well as our long-term financial and operating targets at our Investor Day early next year. Overall, we expect fiscal 2023 to be another strong year for Conn’s and I am excited by the direction we are headed. Finally, I want to share my thanks to all our team members for their continued hard work, service and dedication. So, with this overview, Chandra and I are happy to take your questions. Operator, please open the call up to questions.

[Operator Instructions] Our first question comes from the line of Kyle Joseph with Jefferies. Please proceed with your question.

Hey. Good morning guys. Thanks for having me on and taking my questions. Just I have two around e-comm. Chandra, I think you talked about the growth opportunity there. But longer term, can you give us any sort of sense or goal posts of how you think about the e-comm as a percentage of sales for the consolidated business? And then as a follow-up to that, on e-comm sales, could you give us any sense of the financing mix, does it mirror kind of the consolidated portfolio or do you see more, call it, prime or lease-to-own online?

Yes. Good morning, Kyle. Thanks for the question. We are very excited about our performance in e-commerce delivering almost 300% growth this quarter, and we’ve invested and you can see that, that growth happening and we do believe there is opportunity to continue to invest to further drive that business and we do believe that we can be in line from a penetration standpoint with other similar retailers within our categories. So, we do think there is significant upside in the e-commerce business. From a payment standpoint and a financing standpoint, what we see online is a mix that’s fairly similar to what we see in stores. We see a little bit higher from a cash standpoint and a little bit higher from a Conn’s standpoint with Synchrony being a little bit smaller. But overall, fairly similar to what we see in stores.

Got it. Very helpful. And then, one follow-up from me, just in terms of margin pressure and to go with supply chain issues. I know there is a lot of uncertainty and it’s hard to predict, but any sort of visibility as to when you would expect – I know you talked about them continuing into 2022, but is there any sort of outlook as to when you would expect those pressures to ease?

Yes. We do – as we said in the prepared remarks, we do expect international freight rates to be a headwind for next year and continue into next year. We are starting to see it normalize, so we are seeing it increase for quite a while and it’s starting to normalize and seeing a little bit of reduction, but we do anticipate it continuing to be a headwind for the foreseeable future and don’t have a clear line of sight as to when that will come back down.

Great. Thank you very much for answering my questions.

Thanks, Kyle.

Thank you. Our next question comes from the line of Rick Nelson with Stephens Inc. Please proceed with your question.

Thanks a lot. Good morning. Like to follow-up on the provision guidance. On the 2Q call about nine weeks ago, I believe you are guiding to a lower provision in the second half. Now, you are guiding to a higher provision for the fourth quarter. Curious on what the drivers are there?

Good morning, Rick. This is George. So, the provision was down year-over-year in the third quarter consistent with our expectation. But as we think about the fourth quarter, we are now expecting a greater increase in the portfolio, which is driving a greater – an increase in the allowance this year versus last year. I would also remind you that if you look at the – as I mentioned in my prepared remarks, if you look at the fourth quarter last year, we benefited from a fairly significant reduction in the allowance in the fourth quarter of last year that we don’t expect to see this year.

Okay. Thank you for that. I would just like to get some perspective on the health of your credit customer. We are seeing this customer is seeing a lot of inflation with higher crude, gas prices, and necessities rising. Do you have any concerns there from a either a sales standpoint or a credit standpoint?

Yes . Yes. Good question. So, right now credit is performing well. And we continue to adapt our underwriting in anticipation of a normalized credit environment. If you look on Page 5 of the investor presentation, you can see that we are clearly underwriting to a higher quality credit customer which reduces the volatility. We are still underwriting to a 1,000 basis points of spread, but it reduces the volatility, because we are underwriting to a higher quality level. So, we feel good about our strategy in credit. I think the other thing as it relates to sales, I am excited about our Investor Day that we are going to have at the beginning of next year, but I think the one thing you will see us focus on is running a very stable credit business and utilizing a more modern value proposition to drive the sales versus increasing risk within credit to drive sales.

The only thing I would add to that, Rick, is that, if you look at the portfolio health today, we are in – as good a position as we been in a long time where re-age percent is down significantly year-over-year, TDR percentage down, and 60-day delinquencies. So, heading into or heading out of the pandemic we are positioned from a balance sheet standpoint in a really good position.

Great. Thanks for that. Also, I like to follow-up on the fourth quarter sales trend. You mentioned some pull forward. Can you talk about what the same-store sales are tracking in the holiday quarter?

Yes . Demand remained strong into the fourth quarter. So, our value proposition continues to work and our strong in-stock position has set us up for success in Q4, and our ability to deliver our sales guidance for the full year seems very much achievable, and we are so confident that we’ll deliver a good Q4.

Okay. Very good. Thanks a lot and good luck.

Thanks, Rick.

Thank you.

Thank you. Our next question comes from the line of Brad Thomas with KeyBanc Capital Markets. Please proceed with your question.

Hi, Chandra and George. Good morning. Wanted to follow-up on an earlier question that touched on e-commerce; and Chandra just as you get more time under your belt with Conn’s, I was wondering if you could talk a little bit more about the investments that you think might be necessary to help accelerate e-commerce growth or if you feel like the business has that in place? And what that timeline might look like to help accelerate growth dovetailing off the strong momentum you have here in 3Q?

Yes. Yes. Great question. So, when I look at the e-commerce business, I kind of tarred upon the two different segments that you’ve got the front-end, the customer-facing website and you’ve got the back-end with the supply chain and the delivery. And when I look at our e-commerce business, we are already very strong from a back-end standpoint. We have next day, white glove delivery, which is very unique to us. And our strong in-stock position that we have at the end of Q3, over 80% of the items that we have available to sell. We could get customers next day. And when you compare that competitively, it was a big advantage for us in Q3. So I feel really good about the supply chain component and our ability to continue to utilize and replicate our supply chain going forward. From a front-end standpoint is where we have work to do and we’ve invested in improving the functionality of our website, which is what’s driving a lot of the growth right now. And when you look at the website, there is two – there is really three components. It’s traffic, conversion and average order value and the big opportunity that we are focusing on is conversion and that is a thing that you do to invest in conversion or around site functionality, it’s around shipping speed we already have, shipping pricing, retail pricing. So, we know all the things that we need to do to continue to drive the business and we’ll continue to invest in. We are in the early stages of our transformation. So, we had over 5% penetration. So we have ways to go but a lot of upside for the future.

Really helpful, Chandra. Thank you. And George, if I could just follow-up on Rick’s question just about the fourth quarter. If we take your comp guidance mathematically its face value to be at a mid-teens comp for the year, it would imply that the fourth quarter decelerates pretty significantly and it might be 9% to get to the 16% growth for the full year. Is there anything you are seeing would suggest you to get that level of the slowdown in the fourth quarter and any more color you’d be able to share about? How things are tracking or how you are expecting them to play out?

I mean, I think, as I mentioned in my prepared remarks, we positioned ourselves this year for an earlier holiday season and we certainly saw the benefits as that winning in October and that was reflected in the third quarter results. November was strong. It was just slower than the trends for the third quarter and we are anticipating that that along with December will result in a strong fourth quarter, but somewhat less strong than the third quarter from a sales standpoint.

Yes. That’s helpful. And then, George, last one from me, just as we think about SG&A for 2020, any broad strokes you could help us work with as we think about how growth may play out for next year?

We didn’t put out full guidance for next year, Brad. So, I mean, I think we are continuing to focus on investing in new stores, investing in people in the right place, but we think that with the growth of the business next year, we should be able to leverage SG&A. And we’ve said that before.

Very helpful. Thank you all so much and good luck this holiday.

Thanks, Brad.

Thank you. Our next question comes from the line of Brian Nagel with Oppenheimer & Company. Please proceed with your question.

Hi, good morning. Thanks for taking my questions.

Good morning.

So, the first question, just a follow-up on Brad’s question there. It’s in the comments just with regard to the pull forward in holiday demand. As you look across your store, your merchandize mix, recognizing there are certain categories that probably plan more to holiday purchases and others. Are you seeing – as we try to size the impact of this, this pull forward, are you seeing different trends within different categories depending on their nature relative to holiday demand?

Yes. So, and overall, if you look at what happened in Q3, so we saw an acceleration through the quarter. So, August, we posted a 17.5% comp, September, 18.6% and then October was a 26.7%. So you saw the big lift in October. And when you look at the categories that drove that, you are right that the categories that are more holiday sensitive did drive – did have a larger acceleration than some other categories, specifically within consumer electronics, TV Black Friday pricing went out in October, which it did last year a little bit later, but went earlier this year and the breadth of items that were on sale were far greater than what we saw last year. So, overall, we saw an acceleration in October across categories. But there were some more holiday-sensitive categories that we saw a greater increase in October than others.

That’s helpful. Then the second question I have, with regard to the freight costs, a headwind – and once you talked about this is obviously not unique to cost, but headwinds to gross margins in 3Q and George, you talked about being a continued headwind to fourth quarter. The question is, I guess, how do you see this progressing and probably more importantly, are there levers that Conn’s can pull in the nearer term to help offset or manage some of these freight costs?

Yes. So, as we said, we believe that the international freight cost will continue to be a headwind to margin. But the team is working very hard to mitigate as much as we can. So, both the utilization within our supply chain, as well as sourcing activities, as well as prudently passing on price increases as we feel that we can, given the market conditions. We are balancing all of that along with continuing to try to drive the growth, so we can leverage SG&A and ultimately deliver operating margin leverage. So, there is a lot of puts and takes. It’s a fluid environment, but I do believe that the team is keeping the customer at the center of their decisions, as well as the shareholder and making the decisions further that business in the long run.

Great. Thank you. I appreciate it.

Thank you. Ladies and gentlemen, that concludes our question and answer session. I’ll turn the floor back to Ms. Holt for any final comments.

I just want to thank everyone for your time today and interest in Conn’s. I look forward to speaking with everyone at our Investor Day in Houston early next year. And lastly, I wanted to wish everyone a happy holiday season and a happy New Year. Thank you.

Thank you. This concludes today’s conference. You may disconnect your lines at this time. Thank you for your participation.