Good morning, and welcome to Conn's Fourth Quarter Fiscal 2012 Earnings Call. Conn's offers a valuable credit alternative to customers, and this is the foundation of our strategy.

On Slide 1, you can see that 84% of our customers took advantage of one of our monthly payment alternatives. RAC Acceptance lets us reach a customer we can't finance with Conn's Credit.

GE Money allows us to provide, particularly on higher-priced products, competitive values for customers with higher income and credit scores than our core customer.

Turning to Slide 2, same-store sales of furniture and mattresses increased 46% in the quarter, with gross margins of 38.5%. Slide 3 illustrates the increasing share of the company's gross margins from furniture and mattresses and declining dependence on consumer electronics.

In the strongest quarter seasonally for electronic sales, electronics represented 33% of total gross profit dollars compared to 46% in the year-ago period.

In the first quarter of fiscal 2013, we began to benefit from improvements in sourcing of our furniture products, including offshore sourcing of container quantities of products. These improvements in sourcing should allow us to increase furniture and mattress gross margins to levels more typical of the industry while remaining promotional.

Reseating a large percentage of our furniture line won't be accomplished without some product selection mistakes, and our results in this category will be volatile over the next few months. Inventory turn rates in the category could slow for a period of time as well.

Assortment and sourcing will continually change to some extent, but we expect more stability by the third quarter of this year.

While we are emphasizing furniture and mattresses, we're not deemphasizing our other core categories. Appliances found their footing in the fourth quarter with a 21% same-store sales increase.

This company's heritage is as an appliance retailer, and we see growth opportunities in this category as well. Appliances remains our most important single category and the category customers most closely associate with Conn's.

Home office grew impressively in Q4, and improvements continue on the first quarter of this year. Electronics remains a challenging category, and we have moved away from products at unprofitable price points.

This category is difficult to plan when manufacturers are making changes in an effort to restore profitability. But we are aggressively promoting large screen sizes, where we can earn a reasonable profit margin.

Electronics remains a core category, and we're not pulling away from this category.

Several of our key electronics manufacturers have strengthened their retail pricing discipline. If these programs hold we will benefit, and we support our vendors' efforts.

Large electronics, home appliances, furniture and mattresses are all categories that can benefit from our professional sales process, delivery and installation services. These items don't ship, or return for that matter, as individual items efficiently or easily.

Our core products compete against Web-based alternatives, but we retain critical, sustainable, competitive advantages in addition to our credit offering.

Overall gross margins improved significantly in the fourth quarter compared to the year-ago period. Increasing furniture and mattress sales are responsible for some of the improvement and, as mentioned earlier, furniture sourcing improvements should contribute even more to margin in the future.

We've also become more disciplined in our approach to pricing and virtually eliminated same-store -- I'm sorry, sales floor negotiation. We're promoting fewer low-value products and emphasizing promotion of products at higher price points with higher gross margins.

Improvements in inventory management are reducing the incidence and depth of markdowns. These changes have taken several quarters to execute and are not perfectly implemented, but these improvements should be sustainable.

So far, first quarter fiscal 2013 gross margins are solidly above fourth quarter 2012 levels. Our remodeling program is accelerating with 3 remodels or relocations completed since the end of the third quarter.

We have a further 4 remodels in process with many more in the planning stages. Furniture and mattress sales continue to increase well above our company average in the remodeled stores.

One new market location is under construction, and we have a total of 3 sites committed for 2013 opening. A group of leases is in the late stages of negotiation that we hope to execute in the near future.

All these planned new stores are in markets that are new for the company. We're on track to open 5 to 7 new stores in this fiscal year.

And we're beginning to develop our plans and market identification for fiscal 2014.

Turning to Slide 4, sales associate turnover has declined from earlier levels, although not yet at acceptable levels. Lower turnover is helping us improve sales floor execution, including improving closing rates, sales associate productivity and customer satisfaction.

As shown on Slide 5, we still have not recaptured the market share lost over several years. As execution improves, we should have a better opportunity to recapture this lost share and grow unit sales.

On Slide 6, our strategy of driving Internet traffic to our online credit application is paying benefits. In the quarter, 11.1% of our sales were to customers that first applied for credit on the Web.

Of these customers, 69% are new customers for Conn's. Over this fiscal year, we will work to refine and improve our Internet strategy to build on the success today.

Earnings conference calls tend to focus on opportunity and not on risk, but we don't believe our improving earnings performance is the result of increasing risk. We have decreased business risk in a number of important ways.

As you can see on Slide 11, our leverage has declined and overall leverage is low for a business engaged in consumer finance. Immediately available liquidity has increased as well.

On Slides 7 and 8, loans provided to deep subprime credit scores have declined and the average credit score in the portfolio has increased. In March of 2012, only 1.2% of originations were to credit scores below 550.

Inventory turns are improving, and the aged inventory has been dramatically reduced. We've closed stores generating losses, and sales and gross margin increases have reduced the risk of loss from our Retail segment.

Although we are adding stores, our growth rate is measured and will only accelerate as we demonstrate the ability to execute store growth without disrupting current operations.

As the company returns to growth, management and the board remain aware of the risk in our business and the challenges we have faced in the recent past. Same-store sales performance in the first quarter of fiscal 2013 to date continues the positive trend of the prior 2 quarters.

March sales increased more than February. Comparisons in the last half of fiscal 2013 are more challenging, but we still believe there are opportunities for improvement.

Although our returns on investment have improved, we're not yet meeting reasonable performance goals. Earnings guidance for fiscal 2013 at the high end is about an 11% return on equity.

I would like to again thank our shareholders, vendors and other stakeholders for their patience as we return the company to more acceptable performance. Our associates have shown great endurance as well, and I'd like to thank them for their efforts.

Now I'll turn the call over to David Trahan. David?

Thank you, Theo. I'm going to speak today about our sales and margin performance for the quarter.

We achieved an adjusted retail gross margin of 29.7% during the fourth quarter compared to a 25.1% during the fourth quarter of last year. We continue to focus on product mix, and average selling price has achieved a same-store sales increase of 12.1%.

To recap our same-store sales for our primary categories, I'm going to refer you to Slide 2 in the presentation. Furniture and mattresses were up 46%.

Home appliances were up 21%. Home office was up 30%, and consumer electronics was down 10%.

We continue to see margin benefits from improvement of product mix and increasing average selling prices in all of our primary categories compared to the same time last year. We had a strong quarter in furniture and mattress sales as we continue to expand the floor space and the product assortment and increase advertising and promotional activity in these categories.

The increase in furniture and mattress sales was driven by a 20% increase in unit sales combined with a 16% increase in average selling price. Appliances were up 22%.

Increase on the average selling price partially offset a 3% decrease in unit sales. We continue to mix into high-efficiency laundry, premium side-by-side French-door refrigeration and cooking products.

At $615, our average selling price is approximately 25% above the market according to NPD data. Home office sales were up 25% in the average selling price, partially offset by 12% decrease in unit sales.

The average selling price increase was driven by an increase in notebook and desktop computers. Separately, increased sales in tablets helped drive the increase in this category.

The decrease in consumer electronics was driven by a 31% decrease in unit sales of televisions as our average selling price rose 23% to $803, which represent a 54% higher TV average selling price than the industry during the same time period according to NPD. Our retail gross margin benefited from a higher mix of furniture and mattress sales year-over-year while also seeing higher gross margins from delivering better product mix in furniture, mattresses, appliances, televisions and computers.

We remain focused on improving the product assortment we offer to our customers by displaying more of the latest technology while also leveraging our competitive advantage to provide our customers with affordable payment solutions. From an industry outlook, the TV industry is expected to be down mid- to high single digits.

Appliances, furniture and home office are expected to be flat to up slightly, with the increase coming in the back half of the year. And we expect a robust growth for the mattress industry, driven by strong consumer acceptance of high-end specialty mattresses.

We have been able to deliver a significant reduction in our inventory levels since last year end, driven by the liquidation of eliminated product categories and improved inventory turns. While TV inventory was tight going into February, we are comfortable with our supplies today.

With that, I'm going to go ahead and turn the call over to Mike.

Thank you, David. Before I begin my review of our segment financial performance for the quarter and discuss the recent performance of our Credit operations, I'd like to point out 2 changes we made to our historical financial statement presentation to be more comparable with other industry data.

First, we revised our presentation of net charge-offs and the provision for bad debts to include the portion of charged off credit accounts related to RSA and credit insurance commissions. Previously, we reported these amounts as reductions of revenues in the Credit segment.

Second, we are now reflecting all rebates received from our product vendors as a reduction of cost of goods sold. Previously, a portion of these funds was reported as a reduction of advertising expense in SG&A.

We posted a reconciliation of our quarterly financial statements for the last 3 fiscal years on our Investor Relations website reflecting these changes. The changes did not impact operating or pretax income.

Also, we posted updated quarterly segment financial statements for the past 3 fiscal years.

Looking at our segment performance for the quarter, the Retail segment drove a 334% increase in adjusted operating income on a 4.5% increase in revenues and a 460-basis point increase in adjusted retail gross margin. These improvements were partially offset by an increase in SG&A expense as a percent of revenues, driven largely by increased sales compensation.

I would also note that our retail gross profit was negatively impacted by approximately $800,000 from the liquidation of inventory in the stores we closed in January.

The Credit segment adjusted operating income increased sequentially and as compared to the year-ago period, nearly doubling the amounts reported in each of those periods. The improvement was driven by an increase in the interest income and fee yield to 18.8%; reduced servicing cost, primarily lower compensation expense; and reduced provision for bad debts.

Both servicing costs and the provision for bad debts have benefited from the continued improvement in the credit quality of the receivables as we tightened our underwriting standards over the past couple of years.

While we will not know for several quarters the full impact of the collection and underwriting changes we made this year, the following is a summary of the recent trends in our portfolio performance expectations. The provision for bad debts for the fourth quarter totaled $10.3 million compared to $13.8 million for the same quarter last year.

As of January 31, our reserve for bad debts stood at approximately 7.8% of the balance outstanding as compared to our trailing 12-month net charge-off rate of 7.5%. We expect the charge-off rate to decline during fiscal 2013, starting late second quarter or early third quarter.

The 60-209 days past due delinquency rate was 8.1% at the end of February compared to 6% at the end of February last year. Preliminary March results indicate that delinquency dropped by approximately 70 basis points at the end of February compared to a 50 basis point decline during March last year.

The increase in 60-plus days delinquency rate over prior year levels is the result of our tightened re-aging process.

As shown on Slide 9, during the fourth quarter, we re-aged approximately 4.8% of balances compared to 9.6% the year before, a significant reduction. As a result, as reflected on Slide 10, the balance of the portfolio re-aged has declined meaningfully this year and has dropped to 13.4% of the portfolio as of the end of February.

Our early estimate indicates that the percent of the portfolio re-aged declined another 100 basis points in March.

While the delinquency rate over 60 days has increased, the early-stage delinquency balance is lower than the prior year, giving us the ability to reduce servicing costs and should result in lower late-stage delinquency over the next couple of quarters.

Based on the improving profitability and credit portfolio trends, we believe we are on track to continue to deliver improved and consistent profit contribution from the Credit operation. Primarily as a result of the refinancing we completed during the second quarter and reduced debt balances, interest expense was down $3.9 million compared to the year-ago period.

Turning to our capital and liquidity position. In order to support the receivables increase driven by our sales growth this quarter, our total outstanding debt balance increased by $11.3 million.

During the fourth quarter, though, we began working towards achieving inventory turns in the range of 7x to 8x per year compared to our historical turns around 6x. As a result, we have reduced inventory levels and benefited from the liquidation of aged, slow-moving product this year.

Turning to Slide 11. This improvement, along with the tax season-related credit payment increase during January through March, has improved our liquidity position.

By the end of March, we had reduced our debt balance by $43.8 million since year end to $269.5 million, putting our debt-to-equity ratio at approximately 0.8x, down from 1.5x 3 years ago. At the end of March, we had immediately available borrowing capacity of approximately $120 million and an additional $64 million that could become available with growth in eligible receivables and inventory.

Given our current capital position and growth plans for the next year, we do not believe any additional capital will be required to fund the business for at least the next 12 to 18 months.

same-store sales up mid- to high single digits; 5 to 7 new stores in new markets; Retail segment gross margin between 30% and 32%; a provision for bad debts as a percent of the portfolio balance of 5% to 6%; and SG&A expense as a percent of revenues of 28.5% to 29.5%. Much of this analysis and more will be available in our Form 10-K to be filed with the SEC.

That completes our prepared remarks. Operator, please begin the question-and-answer portion of the call.

As you look at the outlook for gross margin, I think it's probably about 200 basis points higher than it was previously. How much of that is just simply the, I guess, the adjustment you're making for advertising support and where it's being captured in the P&L?

Of the 200-basis point increase in gross margin forecast, the impact of the change in advertising is relatively small, less than 100 basis points.

That's right, 60 to 80 basis points.

Okay. And if you look at your Credit-Retail profit mix, looks like it's starting to work its way back to more normal levels.

I guess as you look out to the coming year, based on your current guidance, how would you expect the gross -- or how would you expect the profit mix for Retail and Credit to shake out? Is it going to be roughly 50-50, or will it be a little bit more lopsided?

I think we will, as we move through the year, we will see it move back to be more in line with our historical 50-50, maybe a little more heavily weighted to Credit than Retail.

And then I think you mentioned that the provision will be coming down for bad debt, even as the portfolio starts to grow in the back half. And I guess I was a little bit surprised by that.

I would have thought maybe by year end, if the portfolio is growing, that the provision would start to grow a little bit, too. I was just curious about how you're thinking about that.

Is it just a reflection of prior credit standards?

Well, I guess 2 comments, one -- 2 points on that. We're not saying the absolute dollar.

We're saying 5% to 6% provision rate. So as the portfolio grows, we will certainly provide on that higher balance in that rate range.

But also, we expect some benefit in the beginning of the year as we are still incurring the higher charge-off here in the first quarter as we flush out some of the higher -- highly delinquent re-aged accounts and the improvements in credit quality continue to bake into the portfolio performance.

Okay. And my final question before I pass it back, I know Best Buy has been testing some lower FICO score-type financing programs in different markets.

And they haven't announced anything officially, but I'm just curious, at least in the Texas market, what you have seen when they've introduced the new program.

In Texas, Best Buy has been working with a provider of rent-to-own financing for several years now, and we have not seen a significant impact from the implementation of that program. Many of the products that Best Buy sells wouldn't be at price points that would allow financing, really.

So their product mix is different enough that we just haven't seen any impact from those programs to date.

First, I wanted to follow up on Dan's question related to Best Buy and the test markets. If I recall correctly, part of the retrenching over the past year was tied to location.

Isn't that another sort of point of separation between you and them in your markets, just where you choose to build your stores?

Yes, we definitely moved away from stores in higher-income markets, and so yes, we've moved away from locations where we don't have the same competitive advantage that we have in lower-income demographic areas.

One related housekeeping item. Are all the stores closed that have been scheduled to be closed, or are there any sort of hanging on right now?

There's still one left to go in Dallas. That should be in the second quarter.

And then last thing, I just wanted to circle back to the discussion on the selling prices and the rapid jump on a year-over-year basis. I was trying to get my hands around how much of that is sort of risk-adjusted pricing of your individual products, what is mix?

Just if you could break that down a little bit, that would be helpful.

Scott, if you could just rephrase that question for me. I'm not sure I can answer it effectively.

What I was trying to get my hands around is whether or not you're boosting prices just to sort of risk-adjust the model so that the model you're carrying is, perhaps, more expensive than at a competitor, but because you're offering a financing, the customers don't really have any choice as to where they buy it or if it's a function of just mix within the different categories.

The answer in virtually all of our categories is the benefit margin that we're receiving is from mix. Home office is the exception.

In that case, there isn't sufficient margin at market prices for us, so we're slightly higher than the market on average in home office. But in our other categories, we're competitively priced and we're still promotional.

We're in ad every week with prices that compete with or beat competitors on our core products. Again, the exception there being home office and some of the small electronics, like cameras.

A few questions. First, I was wondering if you could speak about how fuel trends in your footprint have been trending and if you see any risk there as far as the consumer goes.

Fuel prices here, like everywhere else, have trended up. We've been consistent in our view that that's a risk, particularly to our core customer base.

Right now, we're not feeling the effects of that because of other positive developments in our business. But we do believe that it is a headwind that we face if prices for gas stay up or increase further from where they are today.

Okay. And then with the good numbers that you've seen so far, the comp number in February and March, can you just remind us if there's anything meaningfully different in the year-ago comparisons in April?

No. April was not a strong month.

We were down in April last year, so we don't see anything different in the comparisons for April. We start to face more challenging comparisons, although not particularly strong, in August, and it's not until the September month that we've begun to face what I would consider to be more difficult comparisons.

But even then, we've made significant improvements in both our sales force and our product selection in furniture and mattresses, so we're hopeful to continue positive comps at that point. But comparisons do become more difficult then.

Okay. And then just finally, on the sales associate improvement, what do you feel has been the most meaningful -- what's been the -- as far as your strategies go, what has been most impactful as far as improving that rate?

And what additional areas of opportunity do you see to drive that rate lower still?

The most impactful thing has been increasing their compensation as we've been able to sell more high-gross margin products that pay the salespeople higher rates of commission. So I think the short answer is we're paying them appropriately for their work, and I think that's had an impact.

The second thing is more organizational stability, fewer changes in management and oversight personnel and just more stability in our strategy and approach to the market, and that's allowed the salespeople to be effective as well and earn commissions. So short answer is better pay, but there are also the benefits of a greater stability.

What do you think is driving the acceleration in sales that you're seeing in the February, March period? Are you getting more aggressive on promotions or credit promotions?

No. I don't believe our promotional posture has really changed significantly.

We've always been promotional. I think what's changed is sales floor execution.

We're starting to feel the benefits of remodeling. The stores that we've closed are benefiting our same-store sales performance.

And particularly in March, as we started to see our furniture assortment firm up, we saw a big leap in furniture sales performance in March, and we think that that can continue over the next several quarters. So I'd say it's not a simple answer.

There are lots of different things that are affecting our same-store sales performance, and it's hard to measure the exact impact of each of those. But it's all of those things working together that have allowed us to improve our same-store performance.

Got you. And the 5 to 7 stores that you're planning for this year, you mentioned new markets.

Are those new markets in existing states? And are you planning any relocations?

There are -- there's at least one new state that we will enter this year based on the leases that we've executed. The remainder of the new locations are in our existing states.

We did complete one relocation just this last month. That's been an exciting development for us.

And just 22 days open in the month of March, sales for that month nearly doubled in the relocated location with an improved presentation and a slightly larger sales floor. So we did see one relocation in the month of March that benefited us, and we have several others that we're working on but none that are immediately pending.

Got you. And the new stores, how do they compare with the legacy stores in terms of size and layout, perhaps, location and your volume expectations for those new stores as they compare with the existing stores?

The size of the new locations will be slightly larger, and they vary because we're going in the locations that are existing and are being redeveloped for our use. So the size varies.

But generally, they'll be somewhat larger than our existing locations. We'll implement our new store layout in these locations with more of the sales floor in furniture and mattresses.

And we believe that the average market potential for these new locations is well above our company average today.

Any thoughts on fiscal 2014 on store openings and what the long-term potential might be, maybe, within your existing trade territory or those states that you're planning to go to over the near term?

We haven't firmed up plans for fiscal 2014. We want to see how our store openings go this year and over the next few months before we finalize our plans.

But we think we could excel. We could accelerate somewhat from our growth rate in 2013, but we're still going to be limited in our growth rate by the need for capital in our Credit business.

So I think we could, potentially, if we can execute it, get to a sort of mid-teens or low-teens growth rate in store count, but we're not going to be in a position to grow store counts 20%, 30%, 40% like some have in the retail space. That's definitely not in our plans.

And is a refinance or capital raise in the plans for the current year?

We will continue to look opportunistically, Rick, if the markets and opportunities to diversify the capital structure. But as we talked about already, for the next 12 to 18 months, at least our current capital structure will support our growth plan.

A couple of questions. On Page 12, the provision for bad debt of 5% to 6%, which is up from 3% to 4%, is that all related to the definitional changes of what's in provisions, or is there some increase?

It is largely related to the definitional increase. There's a slight increase over the prior 3% to 4% on a true -- on a comparable basis.

And it would be like what, 150 basis points?

Between 50 and 75 basis point increase.

And you said it includes RSA now. What's RSA?

Repair service agreement commissions.

Okay. Second question is the Best Buy percent was 2.6% in the quarter -- or I'm sorry, the RAC Acceptance was 2.6%, and it was 4% last quarter.

Were you using RAC Acceptance less, or it's just the other one's much stronger?

No. Jordan, the real issue with RAC was our execution, and that's the primary difference between the prior quarter and this quarter, plus seasonal effects on fourth quarter, a little different mix of customer and product.

So the big issue there was really our execution, which we've improved since then, and the RAC Acceptance percentage has gone up in the first quarter to date, getting more back in line with where we were in the third quarter.

And with the stores that have been the longest, what percent would you say the RAC percentage is when they've been most mature? Is it up to 10% of the store?

Is it...

It really depends on the person. It's hard to explain, but the stores that do best with RAC Acceptance aren't necessarily the ones that have had RAC Acceptance the longest.

They are the ones that have the best personnel provided by RAC Acceptance and where there's been the most stability in personnel. And we have some stores that are in the 10% range where we have quality personnel and they've been in place for a period of time and where we, on our side, have stable personnel and collaborate well with the RAC Acceptance personnel.

And the last question is: you gave this FICO score percentage on Page 7 on charge-off score. [indiscernible] really do anything from 550, so how do you really have a charge-off number when everything below 550 is given to others?

Well, historically, we have done below 550, Jordan. So the information there is based on our historical experience, which includes a lot of underwriting below 550.

Got it. But this one would be [indiscernible] as I think about going forward because you're not underwriting that stuff anymore.

That's right. That's really the point we're trying to make is this high charge-off, high collection effort business is a business that we're really not doing anymore.

I've got a quick follow-up to Jordan's question on RAC Acceptance. I'm wondering if you're advertising the RAC Acceptance opportunity outside of your stores, and if so, is that at all changing the profile of the customer you're seeing in your stores?

Generally speaking, we do not advertise the RAC Acceptance program outside of our stores. So we have not aggressively marketed that program, and so it's not having an effect on the type of customers that we're seeing in our stores.

Interestingly, though, we do see a fair number of our online credit applications, even though we don't approve those applications, that turn into RAC Acceptance customers sales because we deliver that customer a message on the Internet application process that says we do have that alternative in our stores. But other than that, we're really not promoting the product outside of our stores.

Interesting. And one quick follow-up to that.

Do you still feel comfortable with your long-term 5% to 10% of sales goal? And how long do you think it takes to get there?

I don't think we're going to see 10%. I think 5% is realistic, maybe a little higher than that.

But I think that, given our customer base, it'd be a challenge for us to reach 10%. We have some locations that do achieve that level of performance, but for us to achieve that level of performance across the chain, I think, would be a challenge.

My question pertains to the existing stores that you plan to remodel. Have you guys -- where does it stand right now, and what's your expectation for this fiscal year?

Well, we have completed 6 remodels or relocations. We have 4 more that are in process today where they're actually under construction, another 10, 12 in the process of planning and permitting, and we expect by the end of this year to have completed somewhere close to 20 remodels that will affect getting close to half of our total revenues, maybe a little bit shy based on where we are on the schedule right now.

But we expect to influence a significant percentage of our sales between now and the end of the year.

In previous past, you guys have spoken about the initial 2 that you remodeled. How has the balance of 4 performed on a same-store sales basis?

Overall, they've continued to outperform, by a pretty wide margin, the company as a whole. We did see in a couple of cases where we remodeled one store in a major metro market, we didn't do a good job of promoting the remodel that we didn't see as high a percentage change in those locations, so we're going back to re-promote in those locations.

But in general, the increase has been significantly higher than the average company increase as a whole, even when you take into account those locations, the 2 locations that didn't perform, as well as the others.

I had a few follow-ups for you. First, on the mix of electronics, understandably, we get why you're diversifying away from that business.

I mean, I'm just curious, as you look out over the next couple of years, directionally, where do you see that going? That's my first question.

Well, I'm going to say my crystal ball on the electronics business is not functioning properly these days. It's a challenge to understand where the industry is going.

But we think that larger screen sizes and new technology in larger screen sizes is still going to give us a product offering that we can retail to consumers at a reasonable product margin. So our focus, without regard to technology, is on larger screen sizes, higher ticket prices where our credit offering creates a competitive advantage for us and where delivery matters.

So I think we're not a market leader here, I think, is the best answer. We're not going to drive the market.

We're going to just participate in it. So I think we're going to take what the market offers where we can earn a reasonable profit.

Then in terms of the penetration or mix of sales, it's dropped precipitously for good reason. Do you see that going to half of what it is today or 20% of sales?

Or directionally, is it -- sort of, like, what's in your plan as you think about that business over the next year or so?

Okay. I'm getting your question better now.

I think the way we think about it is something in the range of 40% or 45%. Maybe 50% of our sales floor space will be allocated to furniture and mattresses over time and that the floor space allocation and the sales should come pretty close over time.

So if we increase furniture sales to more like 35% or 40% of our total sales, I think that you would see electronics diminish proportionately.

Okay. And then with regard to furniture space, when we last met in New York, you had talked about all the different things you were doing, and it really varied by store, but the net result was furniture space was increasing.

I'm just curious today if you have a rough idea of how that furniture space is changing this year given all the changes you're making?

That'd be a rough guess, but again, I think we expect furniture to be 40% or 45% of our sales floor, and over time, that may approach 50%.

Okay. And then with regard to inventory and receivables, as we look forward, should we be thinking about inventory growth more aligned with sales growth going forward, or do you think there's a need to invest more heavily in some of these categories that are, like furniture, that are growing more rapidly?

I think, over the longer term, inventory should grow in alignment with the sales growth. But I think in the short term, as we have products moving, new products and new sourcing moving in and older products and old sourcing moving out, in furniture and mattresses that there'll be a transition period where inventory investment may be a little higher.

But long-term, we should be able to operate with turns in furniture and mattresses at our average for the company as a whole. I don't think that will require additional inventory investment.

And the receivables growth for the Credit portfolio this year, something in line with sales or somewhat lower?

It will -- we expect it to start growing over prior-year numbers in the back half and consistent with kind of historical that the portfolio balance will run between 90% and 95% of LTM retail sales.

Okay. Any color on Best Buy store closings that have been announced recently, if any of them overlap with you based on your intel in the marketplace?

I don't think we have firm knowledge at this point. There may be some that overlap with us.

I think there may be some closings that create opportunities for us in new markets. I think that's what's most encouraging to us.

And because their footprint size is just about perfect for our new floor plans, so that's encouraging. And then the other thing is that the changes in personnel are creating some opportunities for us to attract some high-quality personnel.

So that's the principal benefit that we think we can read from the changes with Best Buy.

Great. I'll leave with one last question, with an online question is in terms of how big that business is for you today, kind of where do you see the future for online going forward?

And is that priced similarly to your stores?

Our online business is principally conducted in our stores. The customer applies online, gets an approval and comes to the store, so there's no difference in the pricing for us.

We do very little, almost, I'd say, negligible amounts of business direct online. How big that business can be for us, I think, is an open question.

We're so early into the process of developing that business, I don't think we even have a good understanding of what its potential is.

Just one question. What is your long-term target on return on equity?

I look at the return on equity in the 2 segments differently. I think in the Retail segment, I think there's an opportunity to earn mid-20s types of returns on equity.

I think that's a higher return opportunity. I think with our low leverage model in Credit, that the opportunity in our Credit segment is more of a low-teens type of return.

Maybe with perfect execution, you could hit mid-teens. So I think our target is in the mid- to upper-teens long-term return on equity, and we think that would be a high standard of performance.

Thanks, everyone, for joining.