RTO Furniture Aaron's 1Q Revenues up 4%

April 26, 2010  by in UnCategorized   

By Home Furnishings Business in Rent-To-Own on April 27, 2010

Rent-to-own furniture, electronics and appliance retailer Aaron's Inc. (NYSE: AAN), Atlanta, reported Monday that first-quarter 2010 revenue of $495.3 million, a record and a 4 percent increase over the prior-year period.

Net earnings from continuing operations increased 5 percent to $37 million, another record, versus $35.4 million last year. Same store revenues for first-quarter 2010 rose 4.4 compared with the first three months of 2009. Same store revenues also increased 2.9 percent for Company-operated stores open for over two years at the end of March 2010.

"As has been the case for a long time we are once again pleased with our quarterly results, which were at the high end of our expectations," said Robert C. Loudermilk Jr., president and CEO of Aaron's. "We have a very predictable, annuity type business that has performed well over the years in all sorts of economic climates. Our customer base remains large, the demand for our household furnishings is strong, and we believe the potential for continued growth still remains quite positive. We anticipate that 2010, our fifty-fifth year, will be another excellent year."

During the first quarter of 2010 the Aaron's Sales & Lease Ownership division opened 12 new company-operated stores and 9 new franchised stores. It also acquired three franchised stores and one store from an unaffiliated operator, and acquired the accounts of four third party stores. Seven company-operated stores and one franchised store were closed during the quarter. In addition, three Aaron's Office Furniture stores were closed.

As of March 31, the Aaron's Sales & Lease Ownership division consisted of 1,080 company-operated stores, 595 franchised stores, 11 company-operated RIMCO stores, and seven franchised RIMCO stores. The company also had 12 Aaron's Office Furniture stores. The total number of stores open at the end of March was 1,705.

Aaron's has updated its guidance for 2010, and current expectations include following:
* Second quarter revenues (excluding revenues of franchisees) of approximately $445 million.
* Fiscal year 2010 revenues (excluding revenues of franchisees) of approximately $1.85 billion.
* New store growth of approximately 5 percent to 9 percent over the store base at the end of 2009, for the most part an equal mix between company-operated and franchised stores.