From Home Furnishing Business
Aaron’s Q2 Revenues Jump 3.3%; Acquires Largest Franchisee
Rent-to-own major Aaron’s Inc. (NYSE: AAN) said second-quarter revenues rose 3.3% to $815.6 million as the company’s Progressive Leasing business continue to pace top-line growth.
The company said Progressive’s revenues jumped 25.1% to $373.5 million, while revenues from its Aaron’s RTO stores fell 10.7% to $433.6 million.
Net income for the quarter slipped 5.6% to $36.3 million or 51 cents per share, due largely to a $13.4 million restructuring charge related to the closing of several underperforming Aaron’s stores. In last year’s second quarter, net income was $38.5 million or 53 cents per share.
"Strong growth at Progressive Leasing and disciplined execution in the Aaron's Business drove increased revenues and improved profitability in the quarter,” said John Robinson, CEO. "Progressive had an exceptional quarter driven by a significant increase in total invoice volume and strong lease portfolio performance. The business has impressive momentum across a diverse mix of verticals and we expect to continue to drive long-term growth with our leading virtual lease-to-own model."
Robinson said the Aaron’s business exceeded expectations due largely to higher lease margin and strong cost control.
Separately, the company announced it has acquired its largest franchisee, SEI/Aaron’s Inc., for $140 million. The deal involves 140 Aaron’s stores in 11 states, primarily in the Northeast.
"We're excited to bring the SEI team and stores into the Aaron's organization," said Robinson. "Founder Charles Smithgall, CEO Chas Smithgall and SEI's President and COO, Dave Edwards, have built an outstanding business over the last 22 years, with a deep leadership team and strong profitability,"
Robinson said Edwards will remain with Aaron’s.
"Aaron's has an exceptional culture and long history of providing customers access to quality products for their homes and families,” Edwards said. “We're confident the legacy we have built together will continue as the organization executes on its long-term strategy."
As of June 30, Aaron’s had 1,093 company-owned and 680 franchised stores. During the second quarter, 62 company-owned and six franchised stores were closed or consolidated with other Aaron’s locations.
The company also boosted its revenue and earnings projections for the year.
Revenues are now projected at $3.33 billion to $3.44 billion, up from an April forecast of $3.1 billion to $3.31 billion. Earnings per share are now projected at $2.10 to $2.30, up from the April forecast of $1.85 to $2.10.