Aaron’s Earnings: Here’s Why the Stock is Rising Now

Aaron’s, Inc. (NYSE:AAN) delivered a profit and met Wall Street’s expectations, AND came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company. Shares are up 0.79%.

Aaron’s, Inc. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share increased 6.38% to $0.5 in the quarter versus EPS of $0.47 in the year-earlier quarter.

Revenue: Rose 2.33% to $552.1 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Aaron’s, Inc. reported adjusted EPS income of $0.5 per share. By that measure, the company missed the mean analyst estimate of $0.5. It missed the average revenue estimate of $562.92 million.

Quoting Management: “Although non-GAAP earnings were up, the special charges recorded in the quarter lowered our overall earnings,” Mr. Allen continued. “In addition, our HomeSmart weekly rental business grew in revenues, but overall performance was less than expected. We have recently made several changes in the HomeSmart management team and continue to solidify our business model. We remain quite positive on the weekly concept, and plan to open an additional five stores by the end of the year, as well as a significant number of new HomeSmart stores in 2014 and beyond.”

Key Stats (on next page)…

Revenue decreased 7.23% from $595.14 million in the previous quarter. EPS decreased 25.37% from $0.67 in the previous quarter.

Looking Forward: Analysts have a neutral outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings is a profit of $0.51 and has not changed. For the current year, the average estimate has moved down from a profit of $2.31 to a profit of $2.19 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)