Aaron's profit flat as revenues climb 8.1% in Q4

Larry Thomas -- Furniture Today, February 10, 2012

ATLANTA — Rent-to-own powerhouse Aaron's Inc. said fourth-quarter revenues rose 8.1%, but profits were essentially even with the comparable quarter in 2010.

Revenues for the three months ended Dec. 31 totaled $523.5 million, up from $484.4 million in the previous year's fourth quarter. Same-store revenues increased 3.7%, and the company said its customer count rose 11%.

Net income totaled $30.53 million or 40 cents per share. In the previous year's fourth quarter, the totals were $30.79 million or 38 cents per share.

Fourth-quarter profits were hampered by a charge of $3.5 million or 3 cents per share for separation costs for former president and CEO Robin Loudermilk, who stepped down in November for health reasons.

"We had good revenue and customer growth during the quarter, and believe the results were outstanding in these challenging economic times," said Ronald Allen, interim president and CEO. "Our market remains large, and the high-quality, affordable basic home furnishings we provide fulfills the desires and needs of our customers."

For the full year, revenues rose 7.8% to $2.02 billion, while earnings slipped 3.9% to $113.8 million or $1.43 per share.

The 2011 revenue figure includes $15.6 million from the company's HomeSmart chain, which focuses in weekly rental contracts. Aaron's had 71 HomeSmart stores as of Dec. 31, and Allen said the company does not plan to open "a significant number of additional HomeSmart stores until the earnings and return on investment potential of this concept are thoroughly evaluated."

The company's core Aaron's Sales and Lease Ownership stores feature monthly payments. At year's end there were 1,144 company-owned and 707 franchised locations.

The company said first-quarter revenues would be about $570 million, and projected earnings per share at 58 cents to 62 cents.

For 2012, Aaron's said revenues would be about $2.15 billion, and reaffirmed its previous earnings guidance at $1.88 to $2.04 per share.