Aaron's cuts 4Q earnings, revenue estimates
Larry Thomas -- Furniture Today, January 13, 2014
ATLANTA — Citing declines in same-store revenue and customer growth, rent-to-own powerhouse Aaron's Inc. trimmed its revenue and earnings estimates for the fourth quarter and 2013 calendar year.
The company said the declines occurred primarily in company-owned stores during the fourth quarter, with both same-store revenues and customer growth falling about 1%.
Product shipments to franchisees also were below last year's fourth quarter, the company said.
The company is now projecting fourth quarter revenues at $555 million - down $20 million from previous guidance - while earnings per share are now projected at 27 cents to 31 cents. That is down from previous guidance of 38 cents to 42 cents per share.
For 2013, revenues are now projected at $2.26 billion - down from previous guidance of $2.24 billion - while earnings per share are now projected to be $1.56 to $1.60. That is down from earlier guidance of $1.67 to $1.71.
"As we have previously stated, there are several factors which have slowed down our growth and financial performance this year, including a difficult economic environment for our low to middle income customers," said Ronald Allen, chairman, president and CEO. "We still feel that with better execution, our core business will return to more normal trends. However, in light of these results, we will be refocusing on all aspects of the company's operations and will take appropriate actions to improve financial performance."
Allen said the company plans to slow the pace of new store openings for both the Aaron's and HomeSmart chains, but he didn't provide specifics.
Aaron's will announce complete 2013 financial results on Feb. 7.
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