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From Home Furnishing Business

Aaron’s Registers Double-Digit Revenue, Profit Jump in Q4

Paced by its Progressive Leasing subsidiary, rent-to-own major Aaron’s Inc. (NYSE: AAN) reported double-digit increases in revenues and profits in the fourth quarter.

Revenues at Progressive, which provides lease-purchase programs in traditional furniture, appliance and electronics stores, jumped 32.3% to $428.5 million, while its Aaron’s rent-to-own stores saw a 3.6% decline in revenues to $446.9 million.

Total revenues, which include franchise fees and interest on loans, were up 11.3% to $884.6 million.

Fourth-quarter profits rose to $177.6 million or $2.46 per share from $21.6 million or 30 cents per share in the 2016 fourth quarter due largely to a tax benefit of $116.8 million stemming from recently-enacted changes in corporate taxes.

"A strong fourth quarter capped a year of significant achievement for Aaron's," said John Robinson, CEO. "We delivered record revenues, EBITDA and non-GAAP diluted EPS for the full year while making strategic investments in each of our businesses to support long-term growth. At the same time, we further strengthened the balance sheet while enhancing returns for our shareholders through share repurchases and dividends.”

Total revenues for the 2017 calendar year were $3.38 billion, up 5.5% from $3.21 billion in 2016. The 2017 figure includes a 27.7% increase in revenues at Progressive and an 8.4% decline in revenues from the Aaron’s stores. Same-store revenues at Aaron’s were down 7% for the year.

Net income totaled $292.5 million or $4.06 per share. That was up from $139.3 million or $1.91 per share in 2016.

Robinson said the Aaron’s stores “are beginning to reap the benefits of our transformation program, (which) encompasses a number of initiatives balanced between revenue growth and cost improvement.”

“Many of the leading indicators we follow for the performance of the Aaron's Business are positive, underscoring our optimistic expectations for the business going forward," said Robinson.

For 2018, the company’s revenue projections include a same-store sales decline of 4% to 1%, and “approaching flat in the fourth quarter.”

Total revenues for 2018 are projected at $3.68 billion to $3.89 billion, while earnings per share are projected at $2.90 to $3.20.

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