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From Home Furnishing Business
Aaron’s Q1 Profits Rise Despite Decline in Lease Revenues
April 28,
2017 by Larry Thomas in Economic News, Industry 
Rent-to-own major Aaron’s Inc. (NYSE: AAN) said first-quarter profits rose 7.3% despite a double-digit decline in lease revenues from its flagship Aaron’s stores.
The company said the Aaron’s shortfall was offset by a 19.4% increase in revenues from its Progressive Leasing unit, which offers rent-to-own programs through traditional retail stores.
Net income for the quarter ended March 31 totaled $53.3 million or 75 cents per share. That was up from $497 million or 68 cents per share in last year’s first quarter.
Total revenues fell 1.2% to $844.6 million, but revenues from the Aaron’s business were down 13.4% to $470.2 million. Same-store revenues from company-operated stores fell 9.3%, and customer count on a same-store basis was down 5.9%
As part of a review of its store base, the company said it will close about 70 underperforming stores in the current quarter, which ends June 30.
As of March 31, Aaron’s had 1,155 company-owned and 688 franchised stores.
Progressive Leasing’s revenue, on the other hand, jumped 19.4% to $366.1 million, and the number of active doors increased 38% to about 18,600. Invoice volume per active door fell 12.8%, however.
"Progressive built on its impressive momentum in door and invoice growth, and its lease portfolio is generating consistently strong performance. We remain optimistic about our ability to continue gaining share in Progressive's large, addressable market," said John Robinson, CEO.
"The Aaron's Business benefited from improved operational execution, and we're encouraged with the progress we are making to transform the Aaron's direct-to-consumer platform," he continued. "Our unique set of assets positions us well to drive long-term growth, and we're making strategic investments to better serve credit-challenged consumers in today's dynamic marketplace."
The company said it is reaffirming the revenue and earnings guidance issued in February. That calls for total revenues of $3.1 billion to $3.31 billion for the calendar year, and earnings per share of $1.85 to $2.10.
The projections include a same-store revenue decline of 8% to 12% at Aaron’s stores.