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Aaron revenues climb 11.6% in second quarter

Profit slips 4.8% because of one-time gain last year

Larry Thomas -- Furniture Today, July 25, 2007

ATLANTA — Rent-to-own major Aaron Rents said second-quarter revenues were 11.6% above last year’s comparable period as the company continued to add stores and generate more sales at existing stores.

Same-store sales were 5% ahead of last year’s second quarter.

Revenues for the quarter amounted to $359 million, including $327.6 million from its Aaron’s Sales and Lease Ownership division. Revenues from the unit were 13% ahead of the same period last year, but revenues from the Aaron’s Corporate Furnishings unit slipped 1.6% to $30.6 million.

Net income totaled $19.7 million or 36 cents per share. That’s a 4.8% decline from the $20.7 million or 39 cents per share, in last year’s second quarter, but the 2006 period included a one-time gain of $4.4 million or 6 cents per share from the sale of Aaron’s Puerto Rico operations.

“Our Aaron’s Sales and Lease Ownership division continues to do well and our prospects for the division’s future are quite good,” said Charlie Loudermilk, chairman and CEO. “We feel we are still on track to add 250 stores during 2007.”

During the second quarter, the division added 15 company-owned stores and 19 franchised stores, acquired 14 franchised stores and sold one company-owned store to a franchisee.

As of June 30, the division had 868 company-owned and 454 franchised stores. In addition, there were 22 company-owned and two franchised Rimco stores.

Loudermilk said about 190 new stores will be added during the second half of the year. As a result of the start-up costs from the aggressive expansion effort, the company lowered its earnings guidance.

Full-year earnings are now projected to be $1.50 to $1.60 per share, down from a projection of $1.55 to $1.65 per share issued earlier this year. The projections don’t include a one-time gain from the sale of a parking garage during the first quarter.

For the first six months of 2007, total revenues rose 11.6% to $746.9 million and net income was up 15.7% to $48.9 million or 89 cents per share.

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