Aaron's Q2 Sales up 8%

July 25, 2011  by in UnCategorized   

By Home Furnishings Business in Financial Reports on July 26, 2011

Rent-to-own home furnishings retailer Aaron's (NYSE: AAN) reported second-quarter 2011 sales of $482.7 million, an 8 percent increase from the prior-year period.

Same-store revenues for Atlanta-based Aaron's were up 5 percent for the three months ended June 30 over second-quarter 2010. Net earnings were $10.8 million versus $24.4 million last year.

According to an announcement of Aaron's second quarter performance, net earnings for the second quarter would have been $33.3 million excluding a lawsuit-related charge over a previously announced jury verdict ruling that a female employee was sexually harassed by her manager. The company strongly believes that the award does not accurately reflect the evidence in the case and plans to file post-trial motions with the Court in an attempt to reduce the size of the award or otherwise appeal the verdict.

For the first six months of fiscal 2011 year, revenues increased 8 percent to $1.015 billion; and net earnings were $55.2 million versus $61.4 million last year.

"Aaron's operating results for the quarter were as we expected and we are extremely pleased with our performance, especially in the current economic environment," said Robert C. Loudermilk Jr., president and CEO. "Providing our customers with needed basic home furnishings with no credit checks and no long-term commitment has been the foundation of our business through the years, and we have proven that our Aaron's concept is a superior model and recession resilient. We believe that business will continue to be strong throughout the remainder of the year.

"We are also quite pleased with the early results of our new and evolving HomeSmart weekly pay concept. During the quarter we opened ten new stores and last week announced the strategic acquisition of the 30 store Crusader rent-to-own chain which we will convert to HomeSmart stores during the upcoming months. With this acquisition and another smaller acquisition pending, we now expect to have approximately 60 HomeSmart stores open at the end of this year. This weekly concept gives us another growth vehicle and looks very promising."

As of June 30, the Aaron's Sales & Lease Ownership division consisted of 1,143 Company-operated stores, 681 franchised stores, 15 HomeSmart stores, 12 Company-operated RIMCO stores, and six franchised RIMCO stores. The Company also had one Aaron's Office Furniture store. The total number of stores open at the end of June 2011 was 1,858.