Third-quarter comp gains helped Aaron’s beat Wall Street earnings and revenues estimates.
Net earnings for the 2021 third quarter were $24.3 million, or 73 cents per diluted share, Aaron’s reported, compared to $32.6 million, or 96 cents per diluted share, in the year-earlier period.
According to Aaron’s, net earnings in the 2021 third quarter included $2.9 million in pre-tax restructuring charges and $400,000 in pre-tax spin-related separation charges. Net earnings in the 2020 quarter included $4 million in pre-tax restructuring charges and $1.7 million in pre-tax spin-related separation and retirement charges.
Adjusted for one-time changes, Aaron’s earnings were $27.6 million, or 83 cents per diluted share, the company noted, versus $37.1 million, or $1.10 per diluted share, in the 2020 quarter.
Aaron’s topped a MarketBeat-published analyst consensus earnings per diluted share estimate of 57 cents. It also topped the revenue estimate of $431.3 million.
On a comparable basis, lease and retail revenues gained 4.6% versus the year-before quarter. Comp growth resulted from primarily a larger same store lease portfolio size to begin the quarter partially offset by lower customer payment activity versus the prior-year period, Aaron’s reported.
Total revenues were $452.2 million compared with $441 million in the 2020 quarter. Increasing size and quality of the lease portfolio, partially offset by lower customer payment activity during the quarter and the reduction of 79 franchised stores during the 15-month period ended September 30, drove the revenue gain. E-commerce revenues advanced 13.3% compared to the year-previous quarter and represented 14.3% of lease revenues versus 13.1% in the 2020 period. Operating profit was $33.2 million versus $41.4 million in the period a year earlier.
In announcing the third quarter results, Aaron’s CEO Douglas Lindsay said, “”I am pleased to announce that Aaron’s third quarter results exceeded our expectations as we continue to track ahead of our long-term strategic plan. In the nearly one-year since our spin transaction, we have strengthened Aaron’s leadership position in the direct-to-consumer lease-to-own market. Through continued investments in our fast-growing e-commerce channel, predictive lease decisioning engine and high-performing GenNext stores, we are delivering a better customer experience, greater productivity and long-term growth in our business With strong third quarter results, we are again raising our revenue and earnings outlook for the full year 2021. I am encouraged by the continued year-over-year growth in our lease portfolio and the robust inventory position we have built as we enter the peak demand season.”