Aaron's earnings up 20% in fourth quarter on 9% revenue gain
Clint Engel -- Furniture Today, February 8, 2013
Net earnings for the Atlanta-based company increased to $36.6 million or 48 cents per share in the quarter, up from $30.5 million or 40 cents per share for the same period a year ago.
Fourth-quarter revenues increased to $568.5 million from $522.7 million. Same-store revenues for company-owned stores were up 4.6%.
For the year, Aaron's net earnings rose 52% to $173 million from $113.8 million in 2011. Revenues increased 10% to $2.22 billion.
Ron Allen, Aaron's chairman, president and CEO, said the annual results were the best in the company's history and were at the high end of its expectations. They included a 6.6% increase in store count for the company, including company-owned and franchised units.
"During the fourth quarter ... we offered a Black Friday promotion that was extremely successful, giving customers the option of immediate delivery of product with no payments until January," Allen said, adding that the promotion led to a record number of agreements during the period.
Aaron's HomeSmart weekly rental business, with 78 company-owned and one franchise store, grew revenues in the quarter to $14.8 million, from $8.9 million, and lost about 1 cent per share. For the year, HomeSmart lost about 6 cents per share on $55.2 million in revenues.
Allen said there are no plans to open a significant number of additional HomeSmart stores until after the second half of the year.
"Under new leadership, we are making progress with this division and believe that the HomeSmart performance will continue to improve in 2013," he said.
Among other things, Aaron's noted that fourth-quarter 2011 earnings were reduced by $3.5 million, or 3 cents per share, in "separation costs" related to the departure of former CEO Robin Loudermilk.
Aaron's Sales & Lease Ownership division grew fourth-quarter revenues 8% to $539.8 million, and for the year, revenues increased 8% to nearly $2.09 billion.
The company opened 37 company-owned Aaron's Sales & Lease Ownership stores, 26 Aaron's franchised stores and two Rimco stores. It acquired two franchised stores and the account of five third-party stores and sold one company-owned Aaron's store to a franchisee. It also opened one and closed one company-owned HomeSmart store.
Aaron's finished the year with 2,073 company-owned and franchised units.
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