Aaron's revenues rise 8.9% in third quarter
Earnings increase 6.3%, in line with expectations
Jay McIntosh -- Furniture Today, October 26, 2010
ATLANTA — Third-quarter revenues for rent-to-own merchant Aaron's were up 8.9% from the same period a year earlier as earnings rose 6.3%, the company reported.
Robert Loudermilk Jr., president and CEO, said the results, including same-store revenue growth of 3.2%, were in line with expectations.
"In this tough economic environment, we have performed very well, providing basic home furnishings that are desired and needed by our customers. We feel that our positive business trends will continue during the remainder of 2010 and look forward for another excellent year in 2011," he said.
Aaron's earned $26.2 million on revenues of $452.2 million in the latest quarter. Earnings per share of 32 cents were up 6.7% from 30 cents in the 2009 period.
The company said it incurred a one-time pretax expense of $949,000 in the 2010 quarter for the continued phasing out of its unprofitable Aaron's Office Furniture division, which it announced earlier this year it was closing. Two of the division's remaining stores were closed in the quarter and two are expected to remain open in 2011 to liquidate merchandise.
For the nine months ended Sept. 30, Aaron's said its revenues of just under $1.4 billion were up 6.6% from last year, while earnings were flat at $87.6 million or $1.07 per share.
Revenues of Aaron's Sales & Lease Ownership franchisees, which aren't included in corporate results, rose 10% in the third quarter to $204.4 million and were up 11% for the nine months to $625.8 million. Franchisees' same-store revenues in the quarter grew 4.5%, the company said.
Looking ahead, the company is forecasting revenues of about $470 million and earnings in the range of 32 to 36 cents per share in the fourth quarter. For the full year, it expects estimated revenues, excluding franchisees, of $1.86 billion and earnings of $1.39 to $1.43, including a charge of about 6 cents per share for closing the office furniture division.
In its first forecast for 2011, the company is forecasting that earnings will jump to $1.54 to $1.70 per share.
New store growth for the company and its franchisees is will be about 7% to 9% this year, with the net store count growing an additional 5% to 9% next year. Aaron's has more than 1,770 company-owned and franchised stores.
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