Aaron’s Advances, But Core Stores Lag In Q3

Aaron’s posted a slight uptick in earnings and sales in its third quarter, but comps fell behind.

For the third quarter ended September 30, Aaron’s posted net earnings of $29.5 million, or 40 cents per diluted share, versus $24.2 million, or 33 cents per diluted share, in the year-earlier period. According to Aaron’s, adjusted diluted earnings per share was 50 cents compared with 39 cents in the year prior.

Third quarter revenues increased to $769 million versus $767.7 million in the 2015 period. Overall revenues for the core Aaron’s business decreased to $454.1 million from $501.7 million from the third quarter of last year. Aaron’s comparable sales in company-operated stores decreased 4.6% during the third quarter year over year as customer count slipped 1.6%.

As for the Internet-based Progressive division, revenues in the third quarter increased to $308.4 million from $266 million in the year-previous period.

During the third quarter, Aaron’s implemented a range of expense reductions to drive further core Aaron’s store business cost efficiencies, the company stated, adding that it continues to review the store base and plans to close underperforming locations, with 56 stores scheduled for shuttering by the end of October. Aaron’s noted that it plans to close additional stores in 2017.

The restructuring expense and store closure initiatives resulted in a pre-tax charge of approximately $4.7 million in the third quarter. The company pointed out that it expects to incur an additional pre-tax charge of about $13 million in the fourth to complete the closure of the 56 stores.