Aaron's Q4, Fiscal-Year Net Plummet
ATLANTA-Ending a difficult year, Aaron's posted a 38.1 percent drop in fourth-quarter net income to $22.7 million, bringing its full fiscal-year net income to $120.7 million, down 30.3 percent from the prior year.
Total revenues for the specialty retailer were down 2 percent to $553.9 million in the quarter, which ended on Dec. 31. For the year, total revenues finished up 1 percent to $2.2 billion. In commenting on the year, Ronald Allen, Aaron's chairman, president and CEO, characterized 2013 as "a year of challenges and change ... and growing revenues and adding customers has been difficult with the ongoing economic pressures on low- to middle-income consumers."
Operating expenses in the quarter rose 8.3 percent in dollars and 452 basis points as a percentage of sales, to 47.5 percent. Gross margin increased 246 basis points to 81.2 percent.
Looking ahead, Allen said it would take several quarters for Aaron's of increasing the company's customer base before it would see significant growth in revenues and earnings, due to the nature of the sales and lease-ownership business. "We have spent substantial effort during the year strengthening our management team and operating practices and procedures," he said, "and believe the corporate infrastructure is now in place to produce solid and sustainable future financial performance."