Aaron’s Settles With The Feds As Q4 Sales Rise

A charge to settle a U.S. Federal Trade Commission matter pushed Aaron’s Progressive division to a loss in the fourth quarter, but not all news was bad news for the company.

The company posted a loss of $107.1 million, or $1.60 per diluted share, for the fourth quarter versus net earnings of $61.7 million, or 89 cents per diluted share, in the year-before period. Adjusted for one-time effects, however, earnings were $78.7 million, or $1.15 per diluted share, versus $70.8 million, or $1.02 per diluted share, in the year-previous quarter.

For the quarter, Aaron’s topped a MarketBeat-Published analyst consensus estimate for earnings per diluted share by nine cents.

Revenues were $1 billion versus $993.2 million in the year-prior quarter. Operating loss was $83.3 million versus an operating profit of $88.3 million in the year-earlier period.

For the full fiscal year, Aarons posted net earnings of $31.5 million, or 46 cents per diluted share, versus $196.2 million, or $2.78 per diluted share, in the year before. Adjusted for one-time effects, earnings were $267.1 million, or $3.89 per diluted share, versus $237.5 million, or $3.36 per diluted share, in the year previous.

Revenues were $3.95 billion versus $3.83 billion in the year prior. Operating income was $105.9 million versus $289.6 million in the year earlier.

John Robinson, Aaron’s CEO, said, “Aaron’s finished the year on a positive note with record annual revenues, adjusted EBITDA and non-GAAP EPS. Progressive’s invoice growth accelerated significantly in the fourth quarter, up 34.4% compared to the prior year. In addition, collections performance at the Aaron’s business improved significantly during the quarter, contributing to positive same-store revenues and strong adjusted EBITDA. Finally, I’m pleased to report that Progressive has reached an agreement in principle with the staff of the FTC regarding the Civil Investigative Demand Progressive received in July 2018. Under the proposed agreement, which requires final approval by FTC commissioners and the U.S. District Court for the Northern District of Georgia, Progressive will make a payment of $175 million and enhance certain compliance-related activities, including monitoring, disclosure and reporting requirements. We have agreed to settle this matter to avoid the distraction and uncertainty caused by protracted litigation and allow Progressive to remain focused on providing competitive, flexible and affordable purchase options to credit-challenged consumers.”