Rent-to-own News - Aaron's Q2: Same store revenues up 2.4%

Aaron's this week announced revenues and earnings for the three and six months ended June 30, 2010.

For the second quarter of 2010, revenues increased 7% to $445.0 million compared to $417.3 million for the same quarter a year ago. Net earnings from continuing operations were down 12% to $24.4 million versus $27.8 million in 2009. Diluted earnings per share were $.30 compared to $.34 per share a year ago, a 12% decrease.

For the first six months of this year, revenues increased 5% to $940.3 million compared to $891.3 million for the first six months of 2009. Net earnings from continuing operations were $61.4 million versus $63.2 million last year. Diluted earnings per share for the first six months were $.75 for 2010 versus $.77 in 2009.

 
As previously announced on June 29, 2010, the Company is ceasing the operations of its Aaron's Office Furniture division. During the second quarter, the Company closed all but four of its Aaron's Office Furniture stores and plans to close the remaining stores by September 30 of this year.

The above mentioned financial results include charges to second quarter operating expenses of $7.1 million, or $.05 per diluted share, relating to the closure of this division. These charges include the write-down and cost to dispose of all office merchandise, estimated future lease liabilities of closed stores, the write-off of leaseholds, severance pay, and other associated costs of closing the stores and the division. Another approximately $2.5 million of charges, or approximately $.02 per share, is expected to be incurred during the remainder of fiscal year 2010.

"The results for the quarter were in line with our current guidance, and closing the office furniture stores is a positive going forward, as we will now be able to concentrate all our efforts on our proven and growing Aaron's Sales & Lease Ownership business," said Robert C. Loudermilk, Jr., President and Chief Executive Officer of Aaron's. "Although revenue growth has slowed somewhat in recent months, our sales and lease ownership business continues to grow in revenues and numbers of customers, and our plans to open additional stores are unchanged. The current business environment remains difficult with continued high unemployment and general uncertainty in the marketplace. We are confident, however, that our 55th year of operations will be another record year for the Company."

Same store revenues (revenues earned in Company-operated stores open for the entirety of both periods) increased 2.4% during the second quarter of 2010 compared to the second quarter of 2009. Same store revenues increased 1.1% for Company-operated stores open over two years as of June 30, 2010.

The Company had 859,000 customers and its franchisees had 465,000 customers at the end of the second quarter of 2010, an 11% increase in total customers over the number at the end of the second quarter a year ago (customers of our franchisees, however, are not customers of Aaron's, Inc.). The customer count on a same store basis for Company-operated stores was up 5.6% in the second quarter compared to the same quarter last year.

At June 30, 2010, the Company had cash on hand of $85.3 million. Recently the Company reacquired 478,805 shares of Common Stock and has the Board of Director's authorization to purchase an additional 5,401,815 shares.