Aaron's profits fall 38.1% as revenue dips
February 19, 2014-- Furniture Today,
Atlanta - Rent-to-own merchant Aaron's revenues dipped 2% in the fourth quarter and earnings fell 38.1%, the company reported.
Ronald Allen, chairman, president and CEO of the Atlantabased company, said the quarter "did not meet expectations. 2013 has been a year of challenges and change for Aaron's and growing revenues and adding customers has been difficult with ongoing economic pressures on low to middle income consumers."
Revenue was $553.9 million in the fourth quarter, down from $565.4 million in the comparable period a year earlier. Earnings of $22.7 million or 30 cents per share were down from $36.6 million or 48 cents per share.
For the year, revenue of $2.2 billion was up 1% from 2012. Net earnings of $120.7 million or $1.58 per share were down 30.3% from $173 million or $2.25 per share the previous year.
Same-store revenues were down 0.9% in the fourth quarter and customer count was down 1.4%, the company reported.
The 2013 earnings were reduced by $28.4 million the company accrued related to a pending regulatory investigation by the California attorney general into Aaron's leasing, marketing and privacy practices, the company said. There was also a $4.9 million charge related to retirement and vacation expenses. In 2012, the company took a $10.4 million charge related to retirement expenses, and recognized $35.5 million in income related to a lawsuit settlement.
Excluding those charges and gains, net income in 2013 would have been $142.4 million or $1.86 per share last year, and $157.4 million or $2.04 per share in 2012, Aaron's said.
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