Aaron's 4Q Revenue Up 10%

February 16, 2010  by in UnCategorized   

By Home Furnishings Business in Financial Reports on February 17, 2010

Rent-to-own retailer Aaron's Inc. (NYSE: AAN), Atlanta, announced fourth-quarter 2009 sales of $446.3 million, a 10 percent increase over the prior-year period; and net earnings from continuing operations of $25 million, a 19.5 percent increase.

Same-store sales for the fourth quarter were up 5.2 percent.

In the fourth quarter of 2008 the company consummated the sale of its Aaron's Corporate Furnishings division, the revenues and expenses of which are no longer reported for continuing operations.

For the year ended Dec. 31, revenues increased 10 percent to $1.753 billion compared with 2008; and net earnings from continuing operations increased 32 percent to $112.9 million.

"This was another outstanding quarter for us," said Robert C. Loudermilk, Jr., president and CEO of Aaron's. "We continue to grow as well as deliver our shareholders excellent financial results, and our view of the future remains optimistic. Our customer base needs basic home furnishings, and no matter what the economic environment we have proven that we are well positioned to fulfill these needs."

The Aaron's Sales & Lease Ownership division opened 25 new company-operated stores and 21 new franchised stores in fourth-quarter 2009. It also acquired one franchised store and sold 10 company-operated stores to a franchisee. In addition, during the quarter four company-operated stores and two franchised sales and lease ownership stores were closed, along with two company-operated RIMCO stores. One new Aaron's Office Furniture store was also opened.

For the 2009 year, Aaron's opened 85 new company-operated stores and 84 new franchised stores. The Company's total net store count from its continuing operations increased 8.8 percent for the year.

During the fourth quarter and fiscal year of 2009 the company awarded area development agreements to open 28 and 159 additional franchised stores, respectively. At the end of December 2009 there were development agreements awarded to open 269 franchised stores that should open over the next several years.

As of Dec. 31, the Aaron's Sales & Lease Ownership division consisted of 1,071 company-operated stores, 590 franchised stores, 11 company-operated RIMCO stores, and seven franchised RIMCO stores. The company also had 15 Aaron's Office Furniture stores. The total number of stores open at the end of 2009 was 1,694.

Looking ahead to first-quarter and full-year 2010, Aaron's amended its guidance to indicate the following:
* First-quarter revenues (excluding revenues of franchisees) of approximately $485 million.
* First-quarter diluted earnings per share in the range of $.62 to $.67 per share, assuming no significant store or asset sales, or weather related issues.
* Fiscal year 2010 diluted earnings per share in the range of $2.15 to $2.35.
* 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.