The Aaron’s Company Releases Second Quarter Financial Results

August 1, 2023  by HFBusiness Staff in Business Strategy, Industry   

Second Quarter 2023 Consolidated Results¹:

Revenues were $530.4 million, a decrease of 13.1%

Net earnings were $6.5 million, an increase of 222.0%; Non-GAAP net earnings² were $12.2 million, a decrease of 50.6%

Adjusted EBITDA^2,3 was $42.4 million, a decrease of 17.0%

Diluted EPS was $0.21; Non-GAAP diluted EPS² was $0.39

Write-offs were 5.4% in the Aaron's Business, an improvement of 30 basis points

Reduced debt $36.1 million in the quarter and $124.3 million since the prior year quarter-end

Updates 2023 full year outlook; lowers revenues, maintains adjusted EBITDA, and increases adjusted free cash flow

Second Quarter 2023 Key Items:

The Aaron's Company

~ Earnings were ahead of internal expectations largely due to ongoing expense controls, despite lower revenues in both business segments

~ Ended the quarter with cash and cash equivalents of $38.4 million and debt of $186.1 million, resulting in a net debt² reduction of $30.2 million in the quarter primarily due to strong cash provided by operating activities

Aaron's Business

~ Earnings before income taxes were $30.8 million; adjusted EBITDA was $49.5 million, which exceeded internal expectations and increased 3.0% as compared to the prior year quarter primarily due to lower total operating expenses and lower write-offs

~ Personnel and other operating expenses benefited from cost optimization initiatives and ongoing investments in technology platforms and marketing analytics

~ Ended the quarter with 230 GenNext stores, 101 hubs, and 101 showrooms

~ GenNext stores accounted for approximately 29% of lease revenues & fees and retail sales

~ E-commerce revenues increased 5.5% as compared to the prior year quarter and represented 17.9% of lease revenues

BrandsMart

~ Earnings before income taxes were $1.1 million; adjusted EBITDA was $4.5 million, which exceeded internal expectations despite lower revenues due to continued pressure on customer demand

~ Began construction on first new BrandsMart store planned to open in Augusta, GA in Q4 2023

An audio webcast of the earnings conference call and presentation slides may be accessed at investor.aarons.com. A transcript of the webcast will also be available at investor.aarons.com.