Aaron’s Reports First Quarter 2016 Results
Aaron’s, Inc. (NYSE: AAN), a leader in the sales and lease ownership and specialty retailing of furniture, consumer electronics, home appliances and accessories, today announced financial results for the three months ended March 31, 2016.
For the first quarter of 2016, revenues increased 4.0% to $854.4 million compared with $821.8 million for the first quarter of 2015. Net earnings increased .9% to $49.7 million compared with $49.2 million in the prior year period. Diluted earnings per share were $.68 in both periods. Non-GAAP diluted EPS were $.71 compared with $.73 last year.
“First quarter results met our expectations,” said John Robinson, President and Chief Executive Officer of Aaron’s. “We delivered on the Company’s goals for revenues, Adjusted EBITDA and non-GAAP earnings per share. At the same time, we made important progress to grow Progressive, strengthen our balance sheet, sharpen our focus at the core business, and expand our customer base.”
“Progressive had an outstanding quarter with a mid-teens increase in active doors and a 23% gain in EBITDA,” continued Mr. Robinson. “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.”
“Our core business was mixed this quarter,” continued Mr. Robinson. “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.”
During the quarter, the Company entered into an agreement to sell the assets of its HomeSmart division. The transaction is scheduled to close in the second quarter of 2016, subject to customary closing conditions.
“We ended the quarter with a strong balance sheet with net debt to capitalization of approximately 21%. Our goal is to increase revenues and invest in future growth while maintaining discipline around profitability. The sale of HomeSmart will enhance our focus on assets with the highest potential for return, and we’ll seek additional ways to optimize cash flow and drive shareholder value as we advance our strategies,” Mr. Robinson concluded.
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