Aaron’s FY Net Dives
ATLANTA-Fiscal-year net income for Aaron’s fell 35.2 percent to $78.2 million, as the lease-to-own retailer incurred extra expenses from its acquisition of Progressive Leasing last April.
Added financial and legal advisory costs, restructuring expenses and transaction costs related to the acquisition took a toll on the bottom line, with total expenses for the fiscal year rising 26.3 percent over last year. This total also included a 23.4 percent jump in operating expenses in dollars, and a pickup of 54 basis points in operating expenses as a percentage of sales, to 46.3 percent.
The acquisition did fuel the top line for Aaron’s to the tune of a 22 percent gain in total revenues, which finished the fiscal year ending on Dec. 31 at $2.7 billion. In the fourth quarter, net income dropped 2.6 percent to $22.1 million. Fourth-quarter total revenues were $759.7 million, up 37.2 percent.
John Robinson, who was named CEO in November, noted that 2015 marks Aaron’s 60th year in business. While the growth in the Progressive side of the business is exceeding the company’s expectations, Robinson added that Aaron’s traditional store-based business “has not performed at a level that is satisfactory over the past few years. I have a high sense of urgency about improving our top line, correctly aligning our cost structure and managing the business for cash efficiency.”
Revenues for the new fiscal year should total about $2.05 billion to $2.15 billion, with lease revenues of from $1.55 billion to $1.65 billion, Aaron’s said.