Leading rent-to-own operator, Aaron's Inc.
(AAN) reported lower-than-expected financial results for the first
quarter of 2013. This Zacks Rank #4 (Sell) company’s quarterly
earnings of 67 cents per share were below its own guidance range of
70–74 cents as well as the Zacks Consensus Estimate of 71
cents.
However, on a year-over-year basis, Aaron’s earnings increased
4.7% to 67 cents per share from adjusted earnings of 64 cents
posted in the year-ago quarter, primarily driven by improved
top-line performance.
Further, on a reported basis, Aaron’s earnings of 67 cents per
share were down 27.2% from 92 cents reported in the comparable
year-ago period. The first quarter of 2011 included an income of
$35.5 million or 28 cents per share related to a lawsuit
settlement.
Quarterly Details
On the back strong comparable-store sales (comps) growth,
Aaron’s top line nudged up 1.6% to $595.1 million from $586.0
million in the year-ago quarter, marking the highest-ever
first-quarter revenues for the company. However, total revenue fell
short of the company’s earlier projection of $630.0 million as well
as the Zacks Consensus Estimate of $631.0 million.
Comps at the company-owned stores increased 3.4% in the quarter,
while stores open for over 2 years witnessed a rise of 1.8%. The
improved comps performance came on the back of 4.1% growth in
customer traffic at the company-operated stores. Moreover, comps at
the company’s franchised stores registered a 2.6% increase
attributable to a 6.6% rise in customer traffic.
Aaron's Sales & Lease Ownership division’s revenues were
recorded at $575.3 million, up 0.8% from the first quarter of 2012.
The company’s HomeSmart division reported revenues of $16.9
million, increasing $4.4 million from the year-ago quarter.
The company’s self-operated stores ended the first quarter with
1,108,000 customers, while its franchisee customer count came in at
592,000. Total customer count increased 6.0% compared with the same
period last year.
Gross profit increased 6.5% to $504.0 million from $473.4
million in the year-ago quarter primarily due to lower cost of
goods sold. Consequently, gross profit margin improved 390 basis
points (bps) to 84.7% from 80.8% in the first quarter of 2012.
Operating income (excluding reversal of accrued lawsuit expenses
and depreciation) came at $250.0 million, up 4.8% from $238.5
million in the year-ago quarter. Consequently, operating margin
expanded 130 bps to 42.0%.
Financial Position
Cash and investments at Aaron’s as of Mar 31, 2013 were $210.0
million and total shareholder equity was $1,188.9 million. The
company generated nearly $103.0 million of cash flow from operating
activities.
At the end of first quarter, the company still has 4,044,655
shares remaining under its current authorization, as it did not
repurchase any shares.
Store Update
During the first quarter, Aaron’s opened 4 new company-operated
Sales & Lease Ownership stores, 7 new franchised stores and 1
RIMCO store. The company also acquired 1 store from its franchisees
operators. Moreover, Aaron's closed 2 company-operated Sales &
Lease Ownership stores.
As of Mar 31, 2013, Aaron’s had a total of 1,230
company-operated Sales & Lease Ownership stores, 748 franchised
Sales & Lease Ownership stores, 78 HomeSmart stores, 1
franchised HomeSmart store, 20 company-operated RIMCO stores, and 6
franchised RIMCO stores. At the end of first quarter, the number of
stores opened stood at 2,083.
Management Guidance
Battered by lower-than-expected quarterly results, Aaron’s
lowered its full-year 2013 revenue guidance to $2.35 billion from
$2.40 billion expected earlier. Moreover, the company now
anticipates earnings per share in the range of $2.11–2.23 per
share, down from the previously announced guidance of $2.25–2.41.
Currently, the Zacks Consensus Estimate stands at $2.31 per share,
which could witness a revision in the future following the
company’s revised guidance.
In 2013, management targets new store growth of about 4%–6% over
2012, with equal numbers of company-operated and franchised stores
and a small rise in the number of HomeSmart stores. Going forward,
Aaron's will also be focused on its strategy of acquiring
franchised stores or selling underperforming company-operated
stores.
Further, Aaron's expects to report total revenue of about $565.0
million in the second quarter of 2013. Earnings per share are
anticipated to be 45– 49 cents compared with adjusted earnings of
47 cents in the comparable prior-year period. Currently, the Zacks
Consensus Estimate stands at 55 cents per share, which could
witness a revision in the future following the company’s
guidance.
Our View
Aaron’s leverages an extensive network of stores to effectively
penetrate into its target markets, which in turn, facilitates the
company to generate healthy sales and gain a competitive advantage
over its rivals, Rent-A-Center, Inc. (RCII) and
Advance America.
Other well performing stocks in the retail consumer electronic
universe are Conns Inc. (CONN) and hhgregg
Inc. (HGG). Conns currently holds a Zacks Rank #1 (Strong
Buy) while hhgregg carries a Zacks Rank #2 (Buy).
AARONS INC (AAN): Free Stock Analysis Report
CONNS INC (CONN): Free Stock Analysis Report
HHGREGG INC (HGG): Free Stock Analysis Report
RENT-A-CENTER (RCII): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
HHGREGG (CE) (USOTC:HGGGQ)
과거 데이터 주식 차트
부터 6월(6) 2024 으로 7월(7) 2024
HHGREGG (CE) (USOTC:HGGGQ)
과거 데이터 주식 차트
부터 7월(7) 2023 으로 7월(7) 2024