Aaron's Lowers Projections for Q4 Earnings, Revenues
ATLANTA-Based on revenue and customer growth that have not met expectations, Aaron's said its fourth-quarter earnings will be less than planned.
Earnings per share are now expected to range between 27 cents and 31 cents, down from the previous projected range of 38-42 cents a share. Revenues are now expected at $555 million, down from the previous estimate of $575 million.
Ronald Allen, the retailer's chairman, president and CEO, said same-store revenue and customer traffic in Aaron's company-owned stores declined by about 1 percent in the quarter. In addition, shipments of products to Aaron's franchised stores were less compared to the fourth quarter of last year. Franchisees did experience positive same-store revenue and customer growth during the quarter, Allen said.
He added that the difficult economic environment for Aaron's low- to middle-income customers was a prime reason for the slowdown in the company's overall business. Allen said the company would refocus all aspects of its operations and "take appropriate actions to improve financial performance." He said one such action would be to slow the future openings of new Aaron's and HomeSmart stores until business improves in existing stores.
Fiscal-year 2014 revenues are now expected at about $2.3 billion. New-store growth will range between 1 and 2 percent over 2013.