Aaron’s Q4 Profits Flat on 3.2% Revenue Increase
Despite the strong performance of its Progressive Finance business, lease-to-own major Aaron’s Inc. (NYSE: AAN) said fourth-quarter revenues slipped 3.2% to $795 million and profits were essentially even with the previous year’s fourth quarter.
The company said fourth-quarter revenues from its Aaron’s stores lease-to-own stores and Aarons.com were down 12%, while same-store revenues from company-owned stores was off 5.8%. In addition, the customer count on a same-store basis was down 4.2%.
Progressive, the company’s virtual lease-to-own business that serves traditional retail stores, saw its revenues shoot up 17.3% in the fourth quarter as active doors increased 36% to approximately 18,000.
Fourth-quarter profits totaled $21.63 million or 30 cents per share. In the 2015 fourth quarter, the totals were $21.73 million or 30 cents per share.
The company said 61 company-owned and four franchised Aaron’s stores were closed during the fourth quarter, and about 70 additional stores have been targeted for closing in the second quarter of this year.
Aaron’s said it ended the year with about 1,860 stores in 47 states and Canada.
For the 2016 calendar year, total revenues increased 0.9% to $3.21 billion. The company said revenues fell 8.5% for its Aaron’s business, while Progressive revenues were up 17.9%.
Full-year earnings totaled $139.3 million or $1.91 per share. That was up from $135.7 million or 1.86 per share in 2015.
"2016 was another strong year for the company. We served more customers than in any year in the company's history and delivered record financial performance," said John Robinson, CEO. "The results reflect disciplined execution across an omnichannel platform that spans retail stores, e-commerce and virtual lease-to-own."
He said the full-year earnings growth was driven by Progressive. "Favorable lease portfolio performance generated improved profitability for Progressive, and strong door growth contributed to a double-digit increase in invoice volume,” he said. “We're excited about the prospects for Progressive as we enter 2017."
For 2017, the company is projecting total revenues of $3.1 billion to $3.31 billion and earnings per share of $1.85 to $2.10.
The company said the projections include the impact of closing about 70 Aaron’s stores and a same-store sales decline of 8% to 12%.