Aaron earnings jump 36% amid credit crunch
By Clint Engel -- Furniture Today, February 23, 2009
Atlanta — Atlanta— Aaron Rents' fourth quarter net earnings soared 36.1% to $21.1 million as tightening consumer credit continued to work in the company's favor.
The rent-to-own specialist's revenues in the quarter rose 11% from the same period a year earlier to $404.9 million.
For the year, revenues increased 14.2% to $1.6 billion and earnings rose 12.4% to $90.2 million.
"As we have experienced for quite some time, we continue to gain revenues and customers even in this economic environment," said Robin Loudermilk, Aaron Rents president and CEO. "As more people see the availability of their credit diminish or disappear, we expect our business will continue to be strong as we satisfy our customers' ongoing demand for basic home furnishings."
Same-store revenues in company-operated Aaron's Sales & Lease Ownership stores increased 6.2% during the fourth quarter of 2008 compared with a year ago.
In a conference call with the investment community, Loudermilk said the chain is seeing more higher-income customers — consumers with household income above $50,000, who "want the flexibility of what our program has to offer" because they don't know what's going to happen three or six months down the road.
Aaron sold its Aaron's Corporate Furnishings division late last year and has restated its results to reflect the division's revenues and expenses as discontinued operations.
Aaron said it expects first-quarter revenues, excluding franchise revenues, to be more than $445 million and expects diluted earnings per share in the 49 cents to 54 cents range. It expects to grow its store count by 5% to 9% for the year.
Aaron Rents
Earnings per share are fully diluted, and all figures in parentheses are losses or declines.
| (a) Includes net earnings from discontinued operations of $69,000 in the 2008 quarter, $1.1 million in the 2007 quarter, $4.4 million in the 2008 year and $6.9 million in the 2007 year. |
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| Quarter ended 12/31 | 2008 | 2007 | Change |
| Revenues | $404,894,000 | $364,662,000 | 11.0% |
| Operating income | 35,346,000 | 25,366,000 | 39.3% |
| Net income (a) | 21,079,000 | 15,492,000 | 36.1% |
| Earnings per share | 0.39 | 0.28 | 39.3% |
| Year ended 12/31 | 2008 | 2007 | Change |
| Revenues | $1,592,608,000 | $1,394,939,000 | 14.2% |
| Operating income | 147,398,000 | 125,339,000 | 17.6% |
| Net income (a) | 90,189,000 | 80,275,000 | 12.4% |
| Earnings per share | 1.66 | 1.46 | 13.7% |
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Aaron Rents earnings soar 36% in fourth quarter
Feb 17, 2009
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