Aaron's Q1 Net Drops
ATLANTA-Lagging revenues and a spike in expenses cut 24.8 percent from Aaron's first-quarter net income, which totaled $38.3 million.
Net revenues in the quarter, which ended on March 31, slipped by 1.3 percent to $585.4 million. Sales at the company-operated retail stores edged up 0.6 percent in total, but same-store revenues and customer counts for the company-operated stores and franchised stores were down 1 percent and 1.8 percent, respectively, in the quarter. Ronald Allen, Aaron's CEO, said about 70 percent of the company-operated stores felt the impact from the severe winter weather through much of the quarter.
Operating expenses were up 5.9 percent in dollars and 307 basis points as a percentage of sales, to 45.2 percent. Gross margin increased by 39 basis points to 15.7 percent.
Looking ahead, Allen said Aaron's is anticipating better results stemming from its recent acquisition of Progressive Finance, a provider of virtual lease-to-own programs, and the company's strategy to grow sales, expand operating margin and increase its cash flow from its core business. He said that "we believe we are now better positioned as a leader in our industry, better positioned to serve our customers and better positioned to drive shareholder value."