The Aaron's Company, Inc. Reports First Quarter 2024 Financial Results, Reaffirms Revenue and Adjusted EBITDA Outlook, Raises Non-GAAP EPS Outlook

Rhea-AI Summary

The Aaron's Company, Inc. reported its first quarter 2024 financial results, with revenues of $511.5 million and adjusted EBITDA of $22.7 million. The company reaffirmed its full year 2024 revenue and adjusted EBITDA outlook, while raising its non-GAAP EPS outlook. Key business highlights include growth in Aaron's Business and e-commerce recurring revenue, as well as improvements in the lease portfolio size. The company also announced a quarterly cash dividend of $0.125 per share.

Positive

• Growth in Aaron's Business and e-commerce recurring revenue.

• Improvements in lease portfolio size compared to the previous quarter.

• Quarterly cash dividend of $0.125 per share announced.

Negative

• Loss per share was $0.46, with a non-GAAP loss per share of $0.15.

• BrandsMart comparable sales decreased by 9.4%.

Insights

Financial Analyst

Analyzing the first quarter financial results from The Aaron's Company, Inc., we see mixed indicators. On one hand, the revenue of $511.5 million indicates a stable inflow, but the loss per share at $0.46 raises some concerns about profitability. Notably, the adjusted non-GAAP loss per share of $0.15 is less severe, suggesting that some of the losses are due to non-recurring items or accounting adjustments. The company's decision to raise the non-GAAP EPS outlook based on a lower estimated tax rate could suggest management's confidence in future profitability improvements. The growth in e-commerce, with recurring revenue up 94.1% and subsequent lease merchandise deliveries, demonstrates a successful pivot to digital and could be a positive indicator for future performance. However, the 4.8% year-over-year decrease in lease portfolio size and BrandsMart's 9.4% decrease in comparable sales indicate potential challenges in core business areas. Investors should weigh these mixed signals carefully, considering the company's strategies to maintain growth and address weak spots.

Market Research Analyst

From a market perspective, the Aaron's Company's results show a clear shift towards e-commerce, with significant growth in that area. This is in line with broader retail trends, where companies are increasingly relying on digital channels to drive sales. Their new omnichannel lease decisioning and customer acquisition program appears to be bearing fruit, with e-commerce recurring revenue increasing sharply. These results may reflect consumer behavior changes post-pandemic, indicating a potential long-term shift in the company's business model. While the overall lease portfolio decline suggests a reduction in in-store or traditional transactions, the sequential improvements and positive momentum into April might signal a recovery phase. Investors should consider the company's progression within the context of these industry trends, particularly as they affect recurring revenue, which is critical for stability and growth in retail lease-to-own markets.

ATLANTA, Ga., May 6, 2024 /PRNewswire/ -- The Aaron's Company, Inc. (NYSE: AAN) today released its first quarter 2024 financial results. Highlights of those results and the 2024 outlook are included below, in the attached supplement, and at investor.aarons.com.

First Quarter 2024 Consolidated Results:

• Revenues were $511.5 million
• Adjusted EBITDA¹ was $22.7 million
• Loss per share was $0.46; Non-GAAP loss per share¹ was $0.15
• Reaffirms full year 2024 outlook for revenue and adjusted EBITDA and raises outlook for non-GAAP EPS on lower estimated tax rate

Key Business Highlights²:

• Aaron's Business recurring revenue written increased 2.3% driven by 6.8% growth in lease merchandise deliveries
• E-commerce recurring revenue written increased 94.1% benefiting from new omnichannel lease decisioning and customer acquisition program
• Lease portfolio size ended Q1 down 4.8% year-over-year, a sequential improvement of 220 basis points from the end of Q4 2023
• Same store³ lease portfolio size ended Q1 down 1.4% year-over-year, a sequential improvement of 300 basis points from the end of Q4 2023
• Positive momentum continued into April with lease merchandise deliveries up 18.6% driven by e-commerce growth of 116.3%
• Write-offs were 5.9%; expect full year write-offs in line with guidance of 6% to 7%
• BrandsMart comparable sales decreased 9.4%, a sequential improvement of 460 basis points
• Announced quarterly cash dividend of $0.125 per share to be paid on July 3, 2024

Full Year 2024 Consolidated Outlook:

• Revenues of $2.055 billion to $2.155 billion
• Adjusted EBITDA¹ of $105.0 million to $125.0 million
• Non-GAAP Diluted EPS¹ of $0.00 to $0.25

The Company will host an earnings conference call tomorrow, May 7, 2024, at 8:30 a.m. ET. Chief Executive Officer Douglas A. Lindsay will host the call along with President Steve Olsen and Chief Financial Officer C. Kelly Wall. A live audio webcast of the conference call and presentation slides may be accessed at investor.aarons.com and the hosting website at https://events.q4inc.com/attendee/241854235. A transcript of the webcast will also be available at investor.aarons.com.

About The Aaron's Company, Inc.

Headquartered in Atlanta, The Aaron's Company, Inc. (NYSE: AAN) is a leading, technology-enabled, omnichannel provider of lease-to-own and retail purchase solutions of appliances, electronics, furniture, and other home goods across its brands: Aaron's, BrandsMart U.S.A., BrandsMart Leasing, and Woodhaven. Aaron's offers a direct-to-consumer lease-to-own solution through its approximately 1,220 Company-operated and franchised stores in 47 states and Canada, as well as its e-commerce platform. BrandsMart U.S.A. is one of the leading appliance retailers in the country with 11 retail stores in Florida and Georgia, as well as its e-commerce platform. BrandsMart Leasing offers lease-to-own solutions to customers of BrandsMart U.S.A. Woodhaven is the Company's furniture manufacturing division. For more information, visit investor.aarons.com, aarons.com, and brandsmartusa.com.

____________________
1.	Item is a Non-GAAP financial measure. Refer to the "Use of Non-GAAP Financial Information" and supporting reconciliation tables in the attached supplement.
2.	Comparisons are to the prior year period unless otherwise noted. Key operating metrics do not include BrandsMart Leasing.
3.	With respect to any metric, "same store" includes all stores open for the 15-month period ended March 31, 2024, excluding stores that received lease agreements from other acquired, closed or merged stores.

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SOURCE The Aaron's Company, Inc.

FAQ

<p>What were The Aaron's Company, Inc.'s first quarter 2024 revenues?</p>

The first quarter 2024 revenues for The Aaron's Company, Inc. were $511.5 million.

<p>When will The Aaron's Company, Inc. pay the quarterly cash dividend?</p>

The quarterly cash dividend of $0.125 per share will be paid on July 3, 2024.

<p>Who will host The Aaron's Company, Inc.'s earnings conference call?</p>

The earnings conference call will be hosted by Chief Executive Officer Douglas A. Lindsay, President Steve Olsen, and Chief Financial Officer C. Kelly Wall.