Aaron’s Inc. Earnings: Booking a Profit Again

Aaron’s Inc. (NYSE:AAN) reported net income above Wall Street’s expectations for the first quarter. Aaron’s is engaged in the sales and lease ownership, specialty retailing and rental of residential and office furniture, consumer electronics and home appliances and accessories.

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Aaron’s Earnings Cheat Sheet for the First Quarter

Results: Net income for Aaron’s Inc. rose to $71.2 million (92 cents per share) vs. $44.4 million (55 cents per share) in the same quarter a year earlier. This marks a rise of 60.5% from the year-earlier quarter.

Revenue: Rose 10.2% to $586.9 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Aaron’s Inc. reported adjusted net income of 64 cents per share. By that measure, the company beat the mean estimate of 60 cents per share. It beat the average revenue estimate of $568 million.

Quoting Management: “We are quite pleased with the results for the quarter and feel we have an excellent start for the year,” said Ronald W. Allen, President and Chief Executive Officer of Aaron’s. “Our results exceeded expectations, revenue and customer growth is strong, and the HomeSmart stores are ramping up as anticipated. We are optimistic that customer demand for the basic household furnishings we offer, especially with our flexible payment terms, will continue to be quite good in upcoming months.”

Key Stats:

Revenue has risen the past four quarters. Revenue increased 8.1% to $523.5 million in the fourth quarter of the last fiscal year. The figure rose 7.3% in the third quarter of the last fiscal year from the year earlier and climbed 8.5% in the second quarter of the last fiscal year from the year-ago quarter.

The company beat estimates last quarter after meeting expectations in the fourth quarter of the last fiscal year with net income of 43 cents per share.

Net income has increased 6.2% year-over-year on average across the last five quarters. The biggest gain came in the most recent quarter, when income climbed 60.5% from the year-earlier quarter.

Looking Forward: Analysts appear increasingly optimistic about the company’s results for the next quarter. The average estimate for the second quarter has moved up from 45 cents a share to 46 cents over the last ninety days. The average estimate for the fiscal year is $1.96 per share, down from $1.97 ninety days ago.

(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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