Aaron Rents 1Q sales up 11.7%; profits soar 35.5%
By Furniture Today Staff -- Furniture Today, April 30, 2007
Atlanta — Aaron Rents had a bang-up first quarter, with revenues increasing 11.7% and earnings up 35.5% to $29.2 million.
"We felt that our first quarter was a good start for 2007," said Charlie Loudermilk, chairman and CEO of the rent-to-own and rental merchant based here. "We plan to continue to aggressively expand operations and look forward to adding more stores."
Included in the quarter's earnings was a $4.9 million gain from the sale of a parking deck at company headquarters. Excluding that, earnings would have been $26.2 million, or 48 cents per share, still a gain of 21.3% from the comparable period a year earlier.
Revenues of $387.9 million in the latest quarter included $351.2 million from Aaron's Sales and Lease Ownership division, up 12% from a year ago. Same-store revenues in company-operated units were up 5.4%. Same-store rental revenues rose 9.3% but were offset by a decline in retail sales and early payouts of lease ownership agreements, the company said.
Aaron's Corporate Furnishings division revenues declined 3% from a year ago to $31.2 million. The division's revenues were aided last year by increased business related to the Gulf Coast hurricanes in late 2005.
Revenues at Aaron's Sales and Lease Ownership franchisee stores, not included in the corporate total, rose 16% from a year earlier to $147.6 million in the quarter.
Loudermilk said the company expects to add 250 company-owned and franchised stores this year. At the end of March, the Sales and Lease Ownership division had 842 company-owned stores, 451 franchised stores and 20 Rimco (wheel rim rental) stores. The Corporate Furnishings division had 49 stores.
For the second quarter, Aaron's is forecasting revenues of over $350 million and earnings of 35 to 39 cents. For the year, it expects revenues of about $1.5 billion and earnings per share of $1.55 to $1.65, excluding the parking deck sale gain.
| Aaron Rents | |||
|---|---|---|---|
| Earnings per share are fully diluted. | |||
| Quarter ended 3/31 | 2007 | 2006 | Change |
| (a) Based on average shares outstanding of 55 million in the 2007 quarter and 51.1 million in the 2006 quarter. | |||
| Revenues | $387,934,000 | $347,287,000 | 11.7% |
| Operating income | 46,880,000 | 34,631,000 | 35.4% |
| Net income | 29,207,000 | 21,561,000 | 35.5% |
| Earnings per share (a) | 0.53 | 0.42 | 26.2% |
