In the first quarter ended March 31, Aaron’s Inc. recorded a slight increase in net earnings to $49.7 million from $49.2 million in the year-earlier period, with diluted earnings per share coming in at 68 cents in both frames.
Adjusted net earnings were $52.1 million compared with $53.4 million as adjusted diluted earnings per share came in at 71 cents compared to 73 cents in the 2015 first quarter. Adjusted diluted earnings per share fell four cents short of an analyst average estimate published by MarketBeat.
Results for the first quarter include the effects of a $2.9 million loss before income taxes at the company’s Dent-A-Med segment, acquired in 2015.
Revenues gained 4% to $854.4 million compared to last year’s first quarter. Comparable store revenues at Aaron’s-operated locations decreased 2.1% versus last year’s quarter with customer count up 0.4%. Revenues at the Aaron’s sales and lease ownership division decreased 5.2% in the first quarter to $523.7 million year over year. An $11 million decrease in store revenues and a $17.3 million decline in non-retail sales drove the decline. Revenues at the company’s HomeSmart division increased 6.4% to $17.8 million. With the contemplated sale of HomeSmart, Aaron’s recognized an impairment charge of $4.6 million during the quarter.
The company’s recently acquired online-based leasing division, Progressive, posted a revenue increase of 21.9% to $306.7 million in the first quarter.
John Robinson, Aaron’s president and CEO, said, “Progressive had an outstanding quarter with a mid-teens increase in active doors and a 23% gain in EBITDA. We’re executing well as we gain share in a large addressable market, with investments to grow the segment being offset by positive trends in gross margin, merchandise write-offs and bad debt expense.”
He continued, “Our core business was mixed this quarter. Comps improved year-over-year and on a sequential basis, and same-store customer counts increased versus last year. However, deliveries were softer than expected during the quarter, and lease activity was concentrated around promotional items. Given the leadership changes we made in the quarter, I’m optimistic these trends can improve.”
Aaron’s operates more than 2,000 company-operated and franchised stores in 47 states and Canada.