From Home Furnishing Business
Hurricanes Send Aaron’s Q3 Profits Down 14%
Rent-to-own major Aaron’s Inc. (NYSE: AAN) said third-quarter revenues rose 9% to $838.9 million, but earnings fell 14% due to store closings and other disruptions in states hit by Hurricanes Harvey and Irma.
The company didn’t say how many Aaron’s stores and Progressive Leasing retail partners were affected, but said the storms reduced earnings by an estimated 6 cents to 8 cents per share in the quarter ended Sept. 30.
Including the hurricane impact, net income totaled $25.3 million or 35 cents per share. That was down from $29.5 million or 40 cents per share in last year’s third quarter.
Revenues from its Progressive Leasing business jumped 29.1% to $398.3 million, while revenues from its core Aaron’s stores fell 4.9% to $431.7 million.
Same-store revenues for company-owned Aaron’s stores fell 5.6%. Excluding the impact of the hurricanes, the company said same-store revenues were off an estimated 5%.
“We are pleased with our third quarter results, particularly in light of the disruptions caused by Hurricanes Harvey and Irma," said John Robinson, CEO. "The storms affected hundreds of stores and retail partners in some of our most important states, and I'm extremely proud of the way our organization came together to help our customers, communities and associates while successfully operating our business."
"Progressive had another quarter of accelerating invoice growth and solid lease portfolio performance driven by new door growth and an increase in volume per active door. We believe our offering is well positioned to continue to deliver robust growth," Robinson said.
"The Aaron's business benefited from a number of positive trends in the quarter, with same-store revenues beating our expectations. We're making solid progress on our transformational initiatives, which we believe will position our direct-to-consumer platform for long-term growth."
For the nine months ended Sept. 30, revenues rose 3.6% to $2.499 billion. Nine-month net income fell 2.3% to $115 million or $1.60 per share.
During the third quarter, Aaron’s completed the acquisition of 104 franchised stores and ended the quarter with 1,181 company-owned stores and 569 franchised locations.
The company said Progressive Leasing has about 20,000 active retail locations at the end of the quarter, a 26% increase. Invoice volume per location was up 8%.